Identifying the best pre qualified credit offers

Have you wanted a credit card but avoid filing out the application over fears of credit rejection? Does the thought of an unnecessary hard inquiry trouble you? Inquiries can really hurt your credit score, especially if you are just a hair above where you need to be credit score wise. You’ve worked extremely hard building up your credit score and every point matters to you.

So what do you do? You want that new credit card but you do not want to take a hit with your credit score. You also do not want the embarrassment of being denied credit, as silly as it sounds it always stings to get denied credit. You can always take advantage of banks pre-qualification checks. The bank can do a soft inquiry with one or more credit bureaus to see if you qualify for a credit card.

Some banks also send out pre-qualified offers in the mail. The banks create these lists by buying marketing lists from the 3 major credit bureaus – Experian, Equifax, and TransUnion each month. The credit bureaus apply a set of strict and judgmental scoring algorithms towards the information they have on file for you, if it matches the lenders requirements it is forwarded to the bank. The banks basically let the credit bureaus know what credit criteria they are looking for the the bureaus compile this list and send it off to the banks. The banks keep this data, and when the banks need to increase their customer base they do a massive mailing campaign. The soft inquiry gives the bank only basic information, but it includes your credit score at least which is one of the biggest barriers for people when it comes to obtaining a credit card.

The banks strive to send the right offers to the right people. That being said, being pre-qualified however is not a guarantee that you will be approved. There is still risk of being denied, but that risk is much less if you have been pre-qualified. If the bank received the data they based their decision on for example 6 months back and if for example you also waited 3 months to respond to the offer that is 9 months for information on your credit report to change. Any change in your credit information can result in a denial of credit. Most people that respond to these offers however are approved, so your chances of a successful application are vastly increased when responding to a pre-qualified offer.

The main reasons for denial are massive changes to credit reports. This usually takes one of three forms. The first is where your credit behavior has changed for the worst, such as being late on payments or running up high balances on your available accounts. The second reason is they may have only pre-screened you with one bureau and the other 2 credit reporting agencies show negative information. If you address, social security number or name has changed since you were pre-screened this to can result in being denied credit, however this can be fixed by calling the bank. If you do get denied the bank will let you know why you were denied.

Even with a pre-qualified offer you may need to provide the bank additional information. There are two big factors that the bank will often ask for. The first is income verification as the banks need to know how much money you make in order to decide what credit limit to give you. The other information they need is verification of employment and length of employment. It helps if you have been with your employer for a year or longer.

If you do get denied do not take it personally. Chances are that you were denied by a computer and not a live human being, these things tend to be fully automated. You can always ask for reconsideration if you have been denied and this gives you the chance to talk to a live person. When you call for a reconsideration be prepared to state your case on why you feel you are a good credit risk. Be prepared with documents on hand such as your budget and how much money you make per year, per month and per week.