What Are Prescreened Credit Card Offers?
If you’ve received an offer in the mail for a “prescreened,” “pre-qualified” or “pre-approved” credit card, that means that you have come up on a list of consumers that could possibly be a match for that issuer’s credit card. These offers can include some great rates and rewards that others don’t, but are prescreened offers safe to redeem? Here’s what you need to know about prescreened credit card offers:
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Why am I receiving a prescreened credit card offer in the mail?
Banks and credit card companies sometimes buy databases from the three major credit reporting agencies. These databases are essentially lists of consumers that fit a specified consumer profile. Often, lenders are looking for people with stellar credit histories with offers designed to help consumers build their credit with responsible use. The most attractive terms can often be extended to those with the best credit.
Will I definitely be approved?
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. Typically, these lists are only looking at basic consumer profiles and are not taking an in-depth look at your credit report. When you apply, the creditor will likely look at your entire credit report 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 obtains 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 choose to apply for 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 negatively affect your credit score, so consider your choice to apply for the offer you receive carefully.
Should I sign up?
If you’re getting one of these offers, you may receive many more. You could be on the list of potentially desirable customers. Make sure you’re getting a competitive offer by comparing and contrasting with other offers you receive. You should also research credit card lenders independently. If you’ve got good credit, you could probably find a pretty good deal on your own. Look at prescreened offers as a way of doing your research and comparing different cards that you may be eligible to receive. You may wind up applying for the best one, but definitely be selective in the offer you choose.
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