Does accepting "pre approved" credit cards hurt my credit?

Question

Don't those inquiries look bad on my report? What are your do's and don'ts on "pre qualified" credit cards? I'm 21 and I want to be really careful. Out of about 8 offers, one looked ok (it's called Salute by Visa), but I need to do more research. Any advice is helpful.

Answer 1

Credit card companies regularly look at your credit. These 'soft inquiries' have little / or no effect. And any effect they may have is only short-term.

Before you accept one of these offers, you may want to compare other credit card offers online. Although credit card companies claim you're 'pre-approved' for an offer, they still have to complete an in-depth evaluation of your credit report before they actually give you an approval. A 'pre-approval' is based solely on your credit score. They still have to evaluate your credit report before their final decision.

Also, keep in mind that if one company provided you a pre-approval for a credit card-- it's likely others will feel the same way about you as a potential card holder. You may want to explore all your options and find the BEST CARD before you accept an offer by mail. You can compare offers at:

http://www.asapcreditcard.com

GOOD LUCK!

Answer 2

The inquiries that pre-approved offers do are called "soft inquiries", that don't go against your credit. It's mainly used to see if you would meet the basic requirements of their marketing offer. Once you do apply then a formal inquiry is performed to determine what you're credit line and APR will be. Be careful applying for too many of these cards can do a number on your credit score. Each "hard" inquiry can knock off up to 3 points off your score and it takes about 2 years for them to be removed. Another suggestion is to see if a low balance credit card or even secured credit cards are offered where you bank. A secured credit card is the easiest, but it has one major drawback: You have to make a deposit upfront that would equal the credit line. For example, if you deposited $500, then you would get the same amount in credit. This deposit is held anywhere from 6 months to a year depending on how well you pay. If you can establish and maintain a solid credit history, then your deposit is refunded with interest and the card becomes unsecured. A tip to keep control of your credit is to make small purchases that you can pay off completely every month. Use the card in emergencies (such as car repairs, medical emergencies) Also when you're applying, find out what the APR will be, or at least an estimate. A lot of companies use the bait-and-switch tactic to get customers by luring them in with a low or 0% APR, then gouging them later on with astronomical rates. A final piece of advice is to shop around, you're still young and trust me, those cards aren't going anywhere. Make sure that you get the one that will work for you!

Good Luck!

Answer 3

Those pre approved cards aren't really pre approved you know. I mean if you apply and they DENY you then good luck telling them that they were preapproved and if they do deny you then the ding is a negative on your score.

RE:
Does accepting "pre approved" credit cards hurt my credit?
Don't those inquiries look bad on my report? What are your do's and don'ts on "pre qualified" credit cards? I'm 21 and I want to be really careful. Out of about 8 offers, one looked ok (it's called Sa...

Answer 4

When future creditors review your FICO score or do a search on your credit history, they will base part of their approval decision on the number of inquiries made against your name. Anytime you apply for credit, this counts as an inquiry. Over three inquiries in say a six month period, alerts the creditor that you have been actively searching for credit and may be a high risk borrower.

In my opinion your inquiries do not correlate to your creditworthiness, but in the eyes of some lenders it denotes desperation. If you want to learn more about lending and borrowing, check out the people to peole loan business at prosper.com. Interesting site. You can also see how potential lenders use the number of inquiries as part of their criteria for making a loan.

As for prepaid cards, presumably you are willing to go that route because nobody will give you a standard card, which also means there have been multiple inquiries done against your name in the recent past. Getting a prepaid will probably not impact your creditworthiness any more than it already is. I don't have a problem with prepaids, if you have the funds to back it up. Also, if you manage your prepaid well, pay on time, etc., you will some be receiving multiple offers for standard cards.

To learn more about personal money management, visit my webpage:

www.squidoo.com/wealthguru

Answer 5

Not that I'm aware of.. I accepted an offer of 0% interest when I was 18. At the end of the introductory period, usually a year, I'll transfer my balance to another credit card that is offering 0% interest for a time. So far my credit score is 750, pretty good for a guy who's 24. As long as you pay your bills on time, you can accept any credit card offer you want.

Answer 6

having credit cards doesn't help or hurt your credit. if you use them a lot and don't make the payments on time or get really into debt is what hurts your credit. just get one credit card and don't use it more than you afford to pay off at the end of the month. that will establish your credit rating if you need to borrow money later on.

Answer 7

I would suggest visiting creditboards.com before you embark on your credit card ventures. That site is worth it's weight in gold when it comes to resources and advice. It can also give you a bit of insight on what can happen if credit is not handled with an emphasis on caution.

Also, assume the worst when reading the fine print. Assume that it applies to 'you' and not some schmuck who cannot handle his finances.

Good luck.

Answer 8

Those pre approved cards aren't really pre approved you know. I mean if you apply and they DENY you then good luck telling them that they were preapproved and if they do deny you then the ding is a negative on your score.

Answer 9

Rule of thumb! Keep one credit card only for emergencies.
Companies are in this to make money and nothing is free for long. I would go to wherever you bank and get one if you need to. Except for going in debt for a house or car unless you are going to college most things can be bought just by putting your money aside till you can afford to pay cash for it.