Inquiries for pre-approved offers do not affect your credit score unless you actually follow through and apply. Even though you are said to be pre-approved, you must still fill out the application that accompanies the pre-approved solicitation before you'll be granted credit. A pre-approval basically means that the lender thinks you have a good chance of being approved based on the information in your credit report, but it is not a guarantee. Pre-approved offers are sometimes referred to as "prescreened."

Key Takeaways

  • Pre-approved offers that you receive from credit card companies will not affect your credit score or appear on your credit report.
  • However, if you decide to go ahead and apply for the card, that can affect your score.
  • If you don't wish to receive pre-approved credit card offers at all, federal law allows you to opt out for either five years or permanently.
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Credit Scores: Hard Vs Soft Inquiries

Two Types of Credit Inquiries

There are two types of credit inquiries, known in the business as soft inquiries and hard inquiries.

Soft inquiries

A soft inquiry is what lenders use in deciding whether to pre-approve a consumer for a credit card. Other examples of soft inquiries include when a consumer's current lenders pull a credit report for an account review, or when a debt collector checks a credit report for recent activity.

When a consumer fills out an application that accompanies a pre-approved offer, the lender will sometimes use the soft inquiry it had previously pulled to make its decision, or it may pull a brand new report using a hard inquiry.

Soft inquiries are seen only by the consumer. They do not affect credit scores, and other lenders cannot see them.

Hard inquiries

A hard inquiry is the kind that's used when someone applies for a credit card or loan, such as a mortgage or a car loan.

Hard inquiries can affect a consumer's credit score, but usually only if there are many of them. Even though the impact of hard inquiries on a credit score is very low compared with other factors, such as someone's bill payment history and credit utilization ratio, potential lenders can see them. Lenders will sometimes deny a credit application because the consumer has too many other recent inquiries, which might indicate that they are going through financial difficulties. However, these hard inquiries fall off a credit report after two years. Alternatively, if the applicant can't wait two years, one of the best credit repair companies might be able to get the hard inquiries removed sooner.

Even hard inquiries, which are initiated when you apply for credit, don't have much effect on your creditworthiness—unless you have a lot of them in a short period of time.

Opting Out of Pre-approved Credit Card Offers

If you would rather not receive pre-approved credit card offers, federal law allows you to opt out for five years. To do that, you can either call 888-5-OPT-OUT (888-567-8688) or visit www.optoutprescreen.com. You can also opt out of pre-approved insurance offers.

It's also possible to opt out permanently, starting at the website above. After you make your request online, you will need to fill out, sign, and return a permanent opt-out election form.