What does pre selected to apply mean

ELI5 - IF I get an "pre-selected" or "preapproved" CC offer but still have to apply, does this mean I can still get rejected, and if so, how can they send an offer saying I'll be approved? from CRedit

Have you ever received a pre-approval offer in the mail? Or maybe you've received a pre-approval offer via email? Then you may have asked yourself, “What does pre-approved mean for a credit card?” Let's find out.

What's a pre-approved credit card offer?

When you've been pre-approved for a credit card offer, this means that you've been prescreened based on specific criteria, including your credit and payment history. Lenders prescreen consumers by requesting a soft inquiry to check credit and determine who qualifies.

Based on these factors, you may be pre-approved for an offer. You might receive these offers from card issuers that you already have an account with, or from affiliated partners who are looking for ways to promote their credit card offerings. Pre-approval offers can be delivered by physical mail or email, or provided verbally through a phone call.

A pre-approval offer suggests you've passed the first step in the screening process. But remember — you can't actually be approved for the card unless you apply. You may seem like a promising candidate, but the lender will likely want more information to process your application.

Pre-approved vs. pre-qualified credit card offers

Pre-qualification and pre-approval processes are different ways for you to review your credit card options.

Pre-approved

If you've received a pre-approval offer, the credit card issuer has reached out to you first because you meet the basic requirements. Pre-approved credit card offers differ because lenders already have the information needed to assess your credit worthiness.

Pre-qualified

Pre-qualification for a card indicates that you've made the first request and reached out to the credit card company to see if you might be approved for the card you're interested in. The credit card issuer may then look at your financial profile and show you credit cards and offers that you might qualify for if you apply. It's not a guarantee, but it's a good sign.

How to get pre-approved for a credit card

In short, the card issuer needs to pre-approve you for a credit card, and then you can take action. Some people receive a pre-approved credit card offer in the mail, whereas others may need to complete an online form to provide the credit card issuer with basic information. Ways to apply for a pre-approval offer include:

Respond to an offer from a credit card issuer

One way to possibly get pre-approved for a credit card is by applying for an offer that the credit card issuer has sent you by mail, email or phone, also known as “prescreened offers.” Although mail may not be as popular as it once was, pre-approved offers may appear in the pile. Offers may include an invitation code that you can enter when you apply.

Request a pre-qualification on the credit card issuer's website

Most major credit card issuers that offer pre-approval have online links to a simple form where you can apply that can be found on the issuer's site. These forms will often ask you to provide basic personal and financial information. Once the information is entered, you may be shown a credit card offer that the issuer feels best fits your financial needs. Your offer may be more personalized since you provide information about yourself. In this situation, you'll need to get pre-qualified first to get pre-approved. Once you're pre-qualified, you may receive a pre-approval offer.

Does a pre-approved credit card affect your credit score?

Pre-approved offers, alone, typically don't impact your credit score because the card issuers perform a soft inquiry instead of a hard inquiry before providing an offer of pre-approval. However, if you follow through and apply for a pre-approved offer, the issuer may request a hard inquiry, which would then be indicated on your report and may impact your credit score.

In summary

So, if you've been asking yourself, “what does pre-approved mean for a credit card?” know that you're not the only one. And while pre-approval offers don't guarantee approval, they can indicate that you have a higher chance of being approved once you finally apply for that card.

The offer is based on a soft credit pull which does not affect your credit. However, you will still need to be officially approved before you can proceed. It is not an official approval but rather an invitation to apply for the actual product, no matter whether it is a loan or a line of credit. 

After you apply, the company will make a hard pull on your credit in order to review your credit history in greater detail. Unlike a pre-approval, this hard pull will affect your credit score. But, not all hard credit pulls are the same, as it depends on the quality of your FICO score. But, on average, a hard pull will drop your FICO score by less than five points. According to FICO, if your credit history is strong -- with no other credit issues -- you'll see less of a drop in your score than someone who has issues with their credit. Fortunately, the drop lasts a few month, provided that other facets of your credit history are in good standing.

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