Can a prequalification hurt your credit score?

Can a prequalification hurt my credit score? Can a prequalification hurt my credit score? Image:

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 score?

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.

However, 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.

Learn more about hard and soft credit inquiries

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?

What’s a hard credit inquiry?

As we mentioned above, 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.

“Hard inquiries have a much smaller impact than most people think,” says Randall Yates, founder and CEO of The Lenders Network. He notes that this may be especially true regarding FICO scores, which only consider inquiries from the past 12 months.

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 them enough information to predict whether you’re likely to be approved.

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

Prequalification is definitively 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 approval odds for certain cards on Credit Karma.

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.