Does Capital One Pre Approval Affect Credit Score?

What are the effects of having a Capital One pre-approval on credit score?

If you have been lucky to receive a pre-approved credit card offer in the mail, you may think that accepting that offer will likely hurt your credit rating. Pre-screened offers are offers from credit card issuers, for instance, Capital One, that have looked at some aspects of your credit report and may consider issuing you with one of their credit cards. However, how closely do they scrutinize your credit, and can applying for any of these pre-approved offers affect your credit reports? Let me show you what you should know.

What Is a Pre-Approval?

A pre-approved credit card offer suggests that the issuing bank has some basic data about you, your credit score, and other elements of your credit report and has deemed you a credit-worthy candidate. Pre-approved offers can reach customers with the probability of being approved by lenders and those interested in credit cards. A pre-approval means that instead of allowing a company to conduct a hard credit inquiry, customers can decline it.

Therefore, the difference between the two is as follows:

This means that credit checks are not always detrimental to your credit scores in every way. The frequency of hard inquiries is more common when you apply for credit independently and not because the credit provider initiates it. In turn, each hard credit check can potentially reduce your credit scores a little bit. In addition, it is important to avoid making too many hard inquiries within a short timeframe since this may be detrimental when one is looking for a loan.

There are two types of inquiries, hard and soft: Hard inquiries happen when you apply for credit or when someone else accesses your credit reports without your permission. Soft inquiries do not appear on the credit reports of other lenders and do not lower your credit scores.

Understanding What Lenders Can See with Soft Inquiry

Under the Fair Credit Reporting Act, the credit card company can verify your name, your address, your social security number, and certain credit information without your permission. They can review your:

Credit accounts opened and their types
The total of all accounts credit that can be accessed without the need for additional authorization
This includes information on any late payments or collection records and
Bankruptcies and foreclosures that are available for public examination

Most importantly, a soft credit check does not affect your overall credit scores or even the total balances. So lenders might pre-approve customers who are not eligible for a loan if they came forward to apply.

How Does Accepting a Pre-Approval Affect Credit?

Applying for a pre-approved credit card does not entail a hard credit check or reflection on one’s credit reports if one just goes ahead to accept the card. The credit check and any effect it has on your credit score only occurs when you apply for the card.

Nevertheless, if you go through the process of filling out an application for registration to obtain a pre-approved card, then the bank, depending on the results of the preliminary check, can perform a hard check of your credit history and decide on compliance with all its criteria or not. This type of credit check will reduce your credit scores by several points immediately.

As we know, opening a new credit card and being approved for it can influence credit use and credit history. These important credit metrics also affect your scores in addition to the above:

Other Impacts of Pre-Approvals on You

While pre-approved offers won't damage your credit on their own, they can impact you in other ways.

They clog up your mailbox. Many people get irritated by all the pre-approved mailings. However, opting out of prescreened offers will not eliminate credit card mail invites, just minimize it.
They expose your information to different parties. Alas, prescreened lists are not completely safe from hacking. Lenders do all they can to safeguard their clients’ information but some incidents have seen one’s name, address, and social security number leaked. It is therefore advisable to monitor your credit reports frequently so that you can detect any case of fraud.
They could encourage spending beyond what is required or affordable. This is because, with credit facilities being easily accessible, some individuals may apply for a new account and then use the credit limit in the wrong way. When deciding on what cards to apply for, be sure to have a strategy on how they will be paid off appropriately.
These are such things as terms and fees. This means that while you are pre-approved, it does not mean that the specific credit card fully addresses your requirements. Make sure to compare the offers carefully and check all the conditions in the contracts.

Other Credit Checks to Steer Clear Of

If you receive a pre-approval but don't want to open a new card right now, consider these options instead.

Request a higher credit limit on the existing cards to prevent a hard inquiry from being made. You may be able to qualify for a higher credit limit than you did before your previous increase.
Be an additional cardholder for somebody else. This means that you get to improve your credit score without having to apply for the credit on your own.
Explore credit builder loans or secured cards if you wish to build up good payment records.
Be careful with your credit and avoid applying for credit until the scores increase.

The Takeaway

While pre-approved credit card advertisements may seem like a sure way to get approved for the exact offer listed, they are not. However, if you do not apply for a full application, then just being pre-approved for a loan will not harm your credit in any way. However, if you do apply and get approved, there will be a slight impact on your credit reports and scores due to the hard inquiry. However, the most effective way to utilize credit to get the highest score possible in the long run is what should be done.

Ready to boost your credit score? Call +1 888-804-0104 now for the best credit repair services near you! Our expert team is here to help you achieve financial freedom and improve your credit. Don't wait—get started today!