How To Pre Qualify For Credit Cards

Marshal McLuhan of the "medium is the message" fame says it all - money, nowadays, indeed has become the poor man's credit.

A regular credit card is like extra money in your wallet that you can spend as you please anytime or not spend at all; you get to keep it for as long as you abide by the card payment terms. Using it is one of the easiest tasks in the world but to pre qualify for credit cards, especially for the regular ones, is a not-as -easy undertaking.

Prequalifying for Regular Credit Cards

To pre qualify for a credit card does not guarantee approval, unless you were given a pre-approved credit card. Being prequalified simply means that you have initially passed their criteria based on your completed credit application. Such criteria may include employment and income, educational attainment, whether you rent or own your home, amount of mortgage, and others - depending on the information asked for in the credit card application. Henceforth, the credit card issuer will continue with the processing of your application, using the soft pull or the hard pull approach of inquiry.

Soft Pull

A soft pull is a financial inquiry or credit check that does not affect your credit score. This frequently occurs and oftentimes you may not be aware that you are being subjected to one. Soft pulls may involve the following: (1) credit report that you yourself request; (2) checks by credit card companies for pre-approved credit card or pre-qualified credit card application; (3) initial credit checks by mortgage companies for loan approval; (4) credit background check by a company planning to employ you; and (5) periodic checks by your insurance or credit card company to monitor you. Each soft pull is recorded in your credit history file but they are for your eyes only and not those of potential lenders.

Hard Pull

A hard pull or hard credit check negatively affects your credit score - pulling down your score by 5 points for about 6 months. Each hard pull will stay on your credit report for 1-2 years and are for the eyes of all lenders. Hard pull is done with your consent and usually involves the following: (1) new credit card applications; (2) requests for activation of a pre-approved credit card; (3) activations of new mobile phone contracts; and (4) opening of a new savings or checking account as required by some institutions.

How to Pre qualify for Credit Cards

The best way to pre qualify for credit cards (regular credit cards - since there are prepaid credit cards mostly for persons with tainted credit history) is a spotless credit track record, as result of financial discipline and responsibility. When applying for a credit card in order to prequalify, get as much in-depth information about the credit card.

Check for features such as Annual Percentage Ratio (APR), cost of annual fees (if any), transactions costs such as for cash advances and others, rewards programs, etc. Check also the mode for credit card prequalification - such as whether the soft pull or hard pull is used. This can be seen in the application form such as when your consent is being asked for a credit check on you.

To avoid the hard pull approach of prequalification - choose beforehand the credit card that is suitable for you. Many credit card institutions prequalify immediately during the application process if you have chosen the right card for you from an array of credit cards offered by them. Do some research or attend credit card forums so you will know the minimum credit rating or score required by the different credit card companies. Compare these with your own credit score so that you will apply with the correct company and for the correct type of credit card.

Pre qualify for credit cards when you are ready. When you have finally been approved and given a credit card - enjoy it but not too much as to use it unwisely and without restraint. Pay the correct dues on time. A credit card is a privilege that can make or break you.


Source: Credit Cards For People With Bad Credit Rating

 Print this page
  |     Bookmark this page