Preapproved vs. prequalified for credit cards: What’s the difference?

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In a Nutshell

Credit card companies often send out offers saying you’ve been preapproved or prequalified for a card. Both preapproval and prequalification mean you’re likely — but not guaranteed — to be approved if you apply. While the terms are similar, it’s important to know that both preapproval and prequalification can be defined and used differently from lender to lender.

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We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

Chances are good you’ve received credit card offers saying you’re prequalified or preapproved for a credit card.

But what exactly does it mean to be prequalified versus preapproved for credit cards? Does it mean you’ll definitely get approved if you apply for the card? In both cases, prequalification and preapproval represent steps toward getting actual approval, but neither guarantees it.

According to the Consumer Financial Protection Bureau, there’s not much difference between the two terms, other than some legal distinctions. Prequalified can mean a company has decided that you look like someone who might be a good fit for their credit card, so they’re inviting you to apply. Preapproval could mean a company has done a bit more research on you — or not.

You might also see the term “prescreened.” Some credit card issuers use that in place of prequalified or preapproved.

Whichever term you see, the bottom line is that the way companies, card issuers and lenders use prequalified and preapproval can vary, so it pays to look closely at the fine print of specific offers before you apply.


Prequalified vs. preapproved: The basics

Here are some basic things to know about credit card prequalification and preapproval.

  • Unsolicited prequalified credit card offers (like the ones that arrive in your mail or email) generally do not represent a hard inquiry credit check. A hard inquiry, which can affect your credit scores, typically happens once you respond to the offer and formally apply.
  • Neither prequalified nor preapproved credit card offers actually come with a credit card (again, you have to apply and be approved first).
  • Neither is a guarantee you’ll be approved for the credit card with the terms advertised — or at all.

In some cases, you can ask to be prequalified or preapproved for a credit card — often through a credit card company’s website.

Some credit card issuers may distinguish between prequalified and preapproval, giving one status stricter requirements than the other — so your odds of approval can be hard to figure out. Again, this can vary from company to company.

What do preapproved and prequalified mean on Credit Karma?

On Credit Karma, “preapproved” means something very specific: If you see a preapproved badge on a credit card offer on Credit Karma’s site, it means you have about a 90% chance of being approved for the card if you apply.

Even though the odds may be in your favor, you’re still not guaranteed the card. If you apply, you could get declined for a variety of reasons, like already having too many accounts with the issuer or not having enough income.

Credit Karma uses the term “prequalified” for loan offers specifically (and not credit cards). You can use our prequalification tool to see what personal loans you’re more likely to be approved for, along with the estimated terms attached to those loans. But again, a prequalification is not the same as approval; you’ll still have to apply for the loan to find out if you’re approved.

Learn more about preapproval and prequalification on Credit Karma

How to opt out of receiving preapproved or prequalified offers

If you don’t want to receive prescreened credit card offers, it’s easy to opt out for five years. Just visit optoutprescreen.com or call 1-888-567-8688. Just keep in mind that by opting out in the ways described in this section, you’re just reducing the amount you get by mail. These opt-out options don’t apply to all prescreened offers.

If you want to opt out permanently, you’ll have to submit a written request after you start the opt-out request on the website.

One thing to note: This only removes you from certain lists associated with the major consumer credit-reporting agencies. You may still receive some offers in the mail or electronically.

The Federal Trade Commission has more information on opting out on its website.


Bottom line

Neither prequalification nor preapproval guarantees actual approval, but it’s a sign the odds might be in your favor. Be sure to read the fine print to understand what the card issuer means by prequalified or preapproved, and be aware that applying typically results in a hard inquiry, which could negatively impact your credit.

You might be able to proactively request prequalification or preapproval before you apply for a credit card. And if you get rejected at this stage, you’ll have saved yourself a hard inquiry and the resulting ding on your credit scores.