Does prequalification affect your credit scores?

Young woman sitting on a bench outside and wondering, "Can a prequalification hurt my credit score?"Image: Young woman sitting on a bench outside and wondering, "Can a prequalification hurt my credit score?"

In a Nutshell

Getting prequalified for a credit card can be helpful, but it's just a first step in getting that new card. Here are some ways to make prequalification work for you.
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If you’ve ever seen your credit scores drop a few points after applying for a credit card, you know the impact a hard inquiry can have on your credit.

Hard inquiries generally occur when a lender or credit card issuer checks your credit when making a lending decision, and you typically have to authorize them.

But what about simply checking if you prequalify for a credit card? Can a prequalification hurt your credit scores?

The simple answer is “no,” but the full picture gets a bit more complicated.

Prequalification is typically considered a soft inquiry, and it won’t hurt your credit all on its own. In fact, it can be a helpful tool for lowering your risk of being rejected for a new credit card.

But prequalification is not a guarantee of approval, and if you want that new credit card, you’ll ultimately have to apply for it — and face the hard inquiry that goes along with it.

Before you apply for a prequalified card, it’s important to understand what “prequalification” means in the first place.

If you’ve shopped around for credit cards online, you’ve likely seen tools that allow you to check whether you’re prequalified before applying. Maybe you’ve even received an offer in the mail informing you that you’re prequalified for a certain card.

So, how do the credit card companies determine that you’re prequalified? In other words, how do they predict that you’ll be approved?

Well, it turns out they’re not actually mind readers.

Credit bureaus may have provided credit card companies with lists of consumers who have credit scores within a certain range.

The companies may then reach out to these consumers with offers for specific cards they’re likely to qualify for, based on this initial information. Since they didn’t get this information through a hard inquiry, your credit scores won’t be affected.

Now that we’ve got the basics out of the way, let’s dive a little deeper into what prequalification entails and what to look out for in terms of your credit scores.

Can a prequalification hurt your credit scores?

A prequalification typically won’t affect your credit score because a hard inquiry usually isn’t involved, while a preapproval may affect your credit score since hard inquiries are more common. But not all lenders will use these definitions so be sure to find out what’s involved before starting the process. That said, having a prequalification or preapproval for a card won’t guarantee you’ll be approved. 

If you want to prequalify for a credit card, you can typically do that on the card issuer’s website — but not all lenders offer prequalification. 

If you try to prequalify for a card but get denied, there are some things you can do. First, you should try and find out why your prequalification was denied so you can try to get a better idea of what to focus on improving before applying again. If you need to get access to a credit card before you can work on your finances, you could apply for cards that may have better approval odds, like a secured card.

What’s a hard credit inquiry?

There are two types of credit inquiries: hard inquiries and soft inquiries.

Hard inquiries are typically triggered when you apply for a loan or credit card and the lender checks your credit when making a decision on your application.

While a new card or loan may follow a hard inquiry, a hard inquiry can also lower your credit scores by a few points. A hard inquiry may remain on your credit reports for up to two years, but the damage may be removed even before then.

Soft inquiries, on the other hand, typically happen when an employer or company checks your credit as part of a background check, or when you check your own credit. A soft inquiry may occur with or without your permission, but it won’t affect your credit scores.

As part of the prequalification process, a lender could perform a soft inquiry, which may give it enough information to predict whether you’re likely to be approved.

If I’m prequalified, am I guaranteed to get the card?

Prequalification is definitely not a guarantee that you’ll be approved. Rather, think of it as an invitation to apply.

The good news? Based on the information the credit card company has on you, you’re more likely to be approved for those offers you prequalify for. The catch? If you decide you want the card, you’ll still have to apply.

The credit card company will then perform a hard inquiry and decide whether to approve you for the card, and at what terms. It may be frustrating, but it’s important to know that it’s still possible to be rejected even though you prequalified.

On a brighter note, it’s also possible to be approved for a credit card even if you weren’t prequalified. This may be the case if you’ve worked to improve your credit over time or if you’re relatively new to credit and your name has never been on a marketing list.

To help minimize your chances of being rejected for a card, you can check your VantageScore 3.0 credit scores from two major credit bureaus and your likelihood of being approved for certain cards on Credit Karma.

Does checking my credit scores on Credit Karma count as a hard inquiry?

No, checking your own credit scores on Credit Karma doesn’t qualify as a hard inquiry, and you can do so as often as you’d like without it affecting your scores.

Learn more about what your Credit Karma Approval Odds really mean

Bottom line

Checking to see if you’re prequalified for a credit card can be a great way to help minimize the risk of getting rejected. But actually applying for any credit card can trigger a hard inquiry that can impact your credit scores.

Just remember: Even if you’ve received a prequalified offer in the mail, or you’re shown to be prequalified by an online tool, it’s not a guarantee you’ll be approved.

Another course is to keep tabs on your current credit scores and compare them to the average approved range of credit scores for a product before applying.

About the author: Ken Saathoff is a personal finance writer with a bachelor’s in English and American Literature from Harvard. In his free time, he likes to cook and play tennis. Read more.