If you’ve received an offer in the mail for a “prescreened,” “pre-qualified” or “pre-approved” credit card, congratulations. Lenders are coming to you instead of you having to go to them. But should you take advantage of these offers? Here’s what you need to know about prescreened credit card offers:
How did they find me?
Banks and credit card companies buy databases from the three major credit reporting agencies: Equifax, Experian and TransUnion. These databases are essentially lists of consumers that fit specified criteria. Often, lenders are looking for people with stellar credit histories. Sometimes, they target folks with less than stellar credit scores. The most attractive terms, of course, are extended to those with the best credit.
Is it a sure thing?
Not necessarily. If you receive a prescreened credit card offer, it means that you met the creditor’s criteria at the time the list was provided by the credit bureaus. When you apply, the creditor will take a deeper look at your credit history and will consider other factors like your income and housing costs. If you’ve recently applied for other credit, or if you’ve missed payments since the offer was mailed, your credit score may have dropped and you may no longer qualify.
How does this affect my credit score?
Receiving prescreened credit card offers in the mail does not affect your credit score. Yes, a creditor has information from a credit reporting agency, but the process they use to acquire it does not count as a “hard inquiry.” It’s a “soft inquiry” and won’t set you back. If, however, you accept one of these offers, the issuers will pull your credit report with a hard inquiry. Too many hard inquiries on your credit report and could affect your credit score.
Should I sign up?
If you’re getting one of these offers, you’re probably going to be getting many more. You’re likely on the list of potentially desirable customers. Make sure you’re getting a competitive offer by looking at more than one. You should also research credit card lenders independently. If you’ve got good credit, you’ll probably find a pretty good deal on your own.
Could receiving offers in the mail risk identity theft?
Anything you receive in the mail that contains your address and some of your personal information could potentially help identity thieves. Paper that ends up in the trash has been a prime target for identity thieves â€” even before the emergence of the internet. If criminals can reference one of these offers, they have a better chance of scoring themselves a credit card in your good name. That’s why it’s a good idea to shred or destroy unwanted offers â€” or any other mail with your information in it.