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.

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.