Q:

How do pre-approved credit card offers affect credit scores?

A:

Quick Answer

Although inquiring about and receiving pre-approved credit card offers does not hurt a person's credit score, the credit check initiated after the application is submitted drops a person's credit score, according to DailyFinance. Pre-approved offers still carry a risk of rejection.

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Full Answer

Although responsible use of credit cards can actually help to build a credit score, every filled application leads to a hard inquiry that negatively affects the customer's credit rating, as stated by FreeScore. Customers should avoid applying for more than one pre-approved credit card each year, and they should avoid all applications if they plan to purchase a home. Some pre-approved credit cards are also mailed by identity thieves and scam artists, so consumers should be wary about sending in an application.

People with good credit and multiple rewards card offers have around 95 percent chance of approval, but the approval rate for those with poor credit falls around 80 percent, as confirmed by DailyFinance. The company is more likely to charge higher interest rates or restrict the card's credit limit than to reject the application, but customers may be able to receive better terms if they threaten to cancel their account. Customers should avoid canceling an account whenever possible as this can negatively affect their credit score.

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