Pre-qualified vs. pre-approved: What’s the difference?
Pre-qualification and pre-approval are terms that can apply to credit cards and various types of loans, including mortgages and car loans. The specific differences between the terms may vary depending on the lender and the type of loan. But generally speaking, both terms can mean that an initial lender review indicates you may be likely to get approved.
Even though these two terms are sometimes used interchangeably, there are some differences to keep in mind. Keep reading to learn more about what it might mean to be pre-qualified or pre-approved for credit card offers or loans.
Key takeaways
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For credit cards, pre-qualified and pre-approved are sometimes used interchangeably. But some credit card issuers may have separate processes and requirements for each.
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Getting pre-qualified or pre-approved for a credit card doesn’t guarantee approval.
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Pre-qualification and pre-approval for credit cards both typically involve soft inquiries, which don’t affect credit scores.
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Applying for new credit generally requires a hard inquiry, which could temporarily cause credit scores to dip.
Pre-qualification vs. pre-approval for credit cards
When a credit card offer mentions that someone is pre-qualified or pre-approved, it typically means they’ve met the initial criteria required to become a cardholder. But they still need to apply and get approved—neither is a guarantee of approval.
With credit cards, “pre-approved” and “pre-qualified” may be more likely to be used interchangeably than with loans. But some credit card issuers might have different criteria for the two. Further, pre-approved offers may be stronger indicators of approval. That means you can generally move forward to the application phase with a higher degree of certainty.
What does pre-qualified mean for a credit card?
In general, pre-qualification means a credit card issuer has done a basic review of your credit reports and found that you might qualify for a card. If you’re interested in the card, you can give the company personal and financial information—like your Social Security number (SSN) and monthly income—to help it take a closer look.
Keep in mind that pre-qualification isn’t a guarantee of approval. But it can give you a sense of whether you may be approved if you take the next step and apply for a card.
What does pre-approved mean for a credit card?
Pre-approval also typically involves a prescreening that’s done by a credit card issuer. The issuer may work with a credit bureau to target people who are likely to qualify for a certain card. For that reason, the criteria may be more rigorous than they are for pre-qualified offers.
Although pre-approval for mortgages and other loans may involve a hard inquiry, pre-approval for credit cards is usually a soft inquiry. But this could vary by issuer.
Tips for getting pre-qualified or pre-approved for a credit card
Credit card issuers typically look into several factors related to credit history and income. Here are a few things you can do to help improve your credit and potentially receive more offers:
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Make on-time payments on your accounts.
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Maintain a low credit utilization ratio.
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Check your credit to have a better understanding of your financial standing.
Keep in mind that requirements can vary by issuer and card.
Why you might receive pre-qualification and pre-approval offers without applying
Credit card issuers typically set some basic initial eligibility criteria for a card. Then the issuer asks credit bureaus for a list of people who meet those criteria. From there, the issuer may send those people pre-qualified or pre-approved offers. Some pre-qualified or pre-approved offers might come to you in the mail, by phone or by email. If you’re interested in a new card, you can respond to these offers and apply to become a cardholder.
How to get pre-approved for a Capital One credit card
Capital One’s pre-approval tool makes it easy to find out if you’re pre-approved for card offers before you apply. Simply answer a few simple questions about yourself and review the offers you may be eligible for. Pre-approval is quick, and it won’t hurt your credit scores.
Learn more about how to get pre-approved for a Capital One credit card.
Pre-qualification vs. pre-approval FAQ
Want to know more? Here are the answers to a few frequently asked questions about pre-qualification and pre-approval:
What’s better: pre-qualification or pre-approval?
Both pre-qualification and pre-approval mean your financial history has been reviewed by a lender, putting you a step closer to potentially securing a line of credit or loan. Neither is necessarily better than the other, but pre-approval may be a longer, more comprehensive process. For mortgages and car loans, pre-qualification may be more of a beginning stage to shopping, whereas pre-approval may be a better indicator to a seller that you’re able to secure financing.
Does pre-qualification guarantee a credit card?
With pre-qualification, lenders review your creditworthiness using basic financial information. But this doesn’t guarantee approval. The same goes for pre-approval.
Does pre-qualification or pre-approval for a credit card affect your credit score?
Typically, credit card pre-approvals won’t impact your credit. That’s because checks that lead to pre-qualified or pre-approved credit card offers usually use soft inquiries that don’t affect your credit scores. A hard inquiry is made only after you respond to a card offer by applying for the card. FICO® explains that a hard inquiry typically has only a minor effect on your FICO score.
Before you apply for a new credit card, learn more about how credit card applications can affect credit scores.
What’s next after getting pre-qualified or pre-approved for a credit card?
After getting a pre-qualification or pre-approval offer for a credit card, the next step is to decide if you want to apply. When you apply for a card, you’ll share more of your financial information, including your income level. That’s also when a card issuer will conduct a hard inquiry.
If you decide you want to apply, that’s a good time to take a closer look at things like interest rates and other card terms and benefits to determine which card is right for you.
Pre-qualification vs. pre-approval in a nutshell
Getting pre-qualified or pre-approved for a credit card can help you apply for a card with more confidence. One way to get started? See if you’re pre-approved with Capital One. Simply answer some pre-approval questions, check out your eligible offers and decide which card may be right for you—with no risk to your credit score.
If you want to see where your credit score stands before you apply for a card, check out CreditWise from Capital One. CreditWise lets you access your TransUnion® credit reports and your VantageScore® 3.0 credit score. And like the pre-approval tool, using CreditWise won’t hurt your credit scores. Plus, it’s free for everyone, whether you’re a Capital One account holder or not.