What Does it Mean to be Pre-Approved for a Credit Card?
We look at how pre-approved credit card offers work, their many benefits, and important considerations to keep in mind.
Updated 
11 min. read
It's late morning, and you notice a notification coming from your phone. Among the various newsletters and updates, you notice an email from your bank. Not having applied for anything, you’re intrigued.
Interest piqued, you can't resist opening it. Inside, you’re greeted by a surprising proposal - a pre-approved credit card offer.
What does it mean to be pre-approved for a credit card?
A pre-approved credit card offer means you've already been pre-screened and met the initial criteria for a particular credit card. In other words, the credit card issuer has already conducted a simple review on your credit history with a soft bureau check and determined that you pre-emptively meet its requirements for approval.
If you decide to jump on the offer and get the ball rolling, you are required to accept it. The lender will then take a look at your portfolio. It should be noted that, while you’re deemed a great candidate for the credit card - these offers are not a rubber stamp of approval.
Some offers use the words “pre-screened” or “pre-selected”. No matter the language, a pre-approved credit card offer has many benefits, which we’ll discuss in more detail below. Some pre-approved credit card offers even include a special welcome bonus. So, this may just be your lucky day.
How would I receive a pre-approved credit card offer if I’ve qualified?
If you’ve qualified, there are several ways that you might receive a pre-approved credit card offer. Typically, the offer will arrive at your door by mail or be sent to you via email.
However, if you’ve already established a relationship with a credit card provider or financial institution, you may learn about your pre-approval by logging into your online banking account or by discussing it in person at a branch. In some cases, they’ll even reach you over the phone to promote a new product.
As an example, B M O shares pre-approved credit card offers using multiple channels. A customer could receive one via email, direct mail, online banking, a phone call or even when visiting their local B M O branch.
Difference between pre-approved vs pre-qualified credit card offers
Pre-qualified, pre-select and pre-approved credit card offers are often used interchangeably, but their meanings vary depending on your geography.
In Canada, the term "pre-approved" is more commonly used, so we will focus on that here while in the United States, "pre-qualified" is the preferred terminology. When you are pre-approved, it means you have met the necessary requirements to become a cardholder and it involves an initial evaluation of your financial status.
Additionally, you will be required to undergo a formal review or “approval” process, to confirm your eligibility at the time of acceptance and this is not guaranteed.
Why am I receiving a pre-approved credit card offer?
Let’s be clear: you’re not chosen for a pre-approved credit card offer as part of a random selection. In fact, there is nothing at all random about the offer received. Above all else, you’re receiving an offer because the financial institute has deemed you credit worthy.
There are, however, a few other possible and quite deliberate reasons for why someone is selected for pre-approval on a particular card. Understanding the cause-and-effect relationship behind these offers can help you strengthen the chances for receiving an offer of your own.
Here are a few possible reasons why you might be chosen for an offer:
Credit score and credit history
Your creditworthiness is essential and a mandatory requirement to qualify for an offer. Lenders take a cursory look at your credit score and how you've managed credit in the past. If you've built a solid credit history, it could increase your chances of receiving a pre-approved offer. As we’ll soon see, “soft” checks are used to assess your spending, earning behaviour and the likelihood that you’ll do well with a specific credit card.
Existing relationship with your financial institution
Loyalty has its perks. In combination with your risk assessment, if you have an established and longstanding relationship with a particular bank or financial institution, they might extend a pre-approved offer to you as a way of rewarding your loyalty.
And here are a few possible reasons why you were offered a specific product:
You’re a good fit for a specific credit card
Lenders analyze your financial profile to identify which credit card would suit your needs and lifestyle. If you’re a good fit for a specific one and the issuer is confident in your qualifications, you might receive a pre-approval offer. For instance, if you frequently make travel purchases, you might trigger a travel credit card offer due to your spending patterns.
Maximizing your rewards potential
Think about it this way – if you already spend a lot on certain categories like travel or dining, a credit card that offers extra rewards in those areas would be a great match for you. Lenders consider your spending habits and choose cards that can maximize your rewards earning potential. B M O, for example, is committed to helping customers get the most value out of our offerings. We want to be sure we offer you a credit card that is most beneficial to you.
No matter the reason(s), it should be understood that a pre-approved credit card offer is just that - an offer. Every recipient has the right to choose whether they want to proceed with the next steps, or if they even want the card at all. They are also not limited to the card that was presented to them. Customers have a choice, so while you may be offered a specific product, you can choose the card you want as long as you are eligible.
Why haven’t I received any pre-approved credit card offers?
Think you have good credit but have not received any pre-approved credit card offers? There could be a number of reasons and you should discuss this with your financial institution so you can work to improve your chances.
That said, one simple answer could be that you've indicated to your bank that you do not want to receive marketing material. If you've told them not to market to you, you could be missing out so check your marketing preferences and if you want to receive offers, make sure to consent to receiving them.
If you’ve received a pre-approved credit card offer, what happens next?
If you don’t want the card, simply ignore the offer. No further action is needed. If you do want the card, however, there are a few steps you need to take to put the process in motion. After all, as we discussed above, being pre-approved is not a guarantee that the card is yours. You still need to accept and start the acceptance process.
Before you do anything, though, give the offer a good read. Don’t dismiss the fine print. Make sure you fully understand the details, including the special terms and conditions as well as the benefits that the card would deliver. If you’ve received another pre-approved offer, compare the two to see which is best suited to you, your lifestyle and goals.
Keeping in mind your financial situation and aspirations, ask yourself: can I take on more debt now? Can additional credit be useful to me? Are the benefits and rewards offered by this card consistent with what I’m looking for? Will this card add value to my life?
If after answering those questions, you’ve decided to take advantage of the opportunity, you need to accept the offer as a first step. You’ll then be guided to start the acceptance process for the card. Once the acceptance is submitted, the lender will undergo a review of your profile. Only after that more stringent review will the issuer offer a final yay or nay.
Can I be declined after receiving a pre-approved credit card offer?
Yes, you read that right: even though you were presented with a pre-approved offer that you graciously accepted, there is still a chance you can be declined. There are various reasons why, including:
- A change in employment
- Making numerous recent applications for credit products
- A change in your credit profile
- Inaccurate information
- Delinquency on another lending product
- Fraudulent activity
If you’ve made numerous applications for credit products since you were pre-approved, for example, you may be considered a riskier candidate than before. A change in your employment status or credit profile since you were pre-approved can impact the outcome too. If you’ve been let go at work, your unemployment status can now render you ineligible for the initial offer.
You may have provided inaccurate information—or left discrepancies and gaps— in your acceptance form. A simple error in the address or date of birth provided could be at issue. Or there’s found to be a delinquency (a late payment on your credit report that is 30 days or more past its due date) on another lending product of yours from the same lender.
Finally, it should go without saying that any detection of fraudulent activity would automatically be a cause of rejection.
Does a pre-approved credit card offer impact your credit score?
In searching for ideal candidates for pre-approved offers, issuers typically ask consumer reporting agencies (Equifax or TransUnion) to conduct a broad review of prospective recipients’ financial details. These reviews are good indicators of how effectively candidates are managing their credit.
Even though a pre-approved offer involves this review of financial information, in the case of B M O, it doesn’t affect your credit score. When it comes to credit checks, it comes down to the distinction between a “soft” and “hard” credit inquiry. A pre-approval falls into the “soft” category which doesn’t impact your credit score (other “soft” checks include your own inquiries and identity verification).
On the other hand, if you go through the full application process without a pre-approved offer, you might encounter a "hard" credit check. These types of checks can have a temporary impact on your credit score. Good news is, B M O doesn't do a hard inquiry for pre-approval. So, you can rest easy knowing your credit score won't take a hit just for being pre-approved.
While a pre-approval will not impact your credit score other financial behaviours can. Among the flags are credit use and payment history.
Benefits of a pre-approved credit card offer
There are several advantages to receiving a pre-approved credit card offer. Let’s dive in!
1. It doesn’t affect your credit score
As we’ve just seen above, a pre-approved credit card offer involves a soft inquiry which doesn’t affect your credit score. This means you get to view and take advantage of your pre-approved options without any concern about affecting your credit score. Keep in mind that most issuers – including B M O – do not conduct a hard inquiry when it comes to pre-approved credit cards.
2. You have a credit card waiting for you
If you want to take advantage of the opportunity, it’s there for the taking. Sounds pretty convenient, right?
3. There’s a greater likelihood of approval
Should you decide to accept the offer for the card, chances are good that you’ll be approved. Of course, if your financial situation changes significantly since you received that pre-approval, the odds could change a bit. But that scenario is uncommon.
4. You can improve your credit score
Using your credit responsibly, including making timely payments and managing your debt, can improve your credit score. By demonstrating financial discipline, you signal to lenders that you are a reliable borrower. Consistently meeting payment obligations shows effective credit management, resulting in a positive impact on your credit score.
5. It saves you time and effort
Considering the many choices of credit cards out there, you can easily spend hours and hours searching for the right one. What a time-saver it is to have lenders come to you instead and you avoid the typical application process. As long as you maintain a good credit score and history, you can attract offers for excellent options of cards boasting excellent rewards and other benefits.
Bottom line
Pre-approved credit card offers come with many advantages. While a new credit card is not ideal for everyone, for those searching to build credit while enjoying rewards and saving time, a pre-approved offer may be the invitation you’re looking for.
From its positive impact on your credit score, to its convenience, and the strong likelihood that - if accepted - the card will be yours, every pre-approved offer is worth a serious consideration. Remember there are no guarantees of approval. But if you take good care of your credit score and act financially responsible, the probabilities are good. To be safe, check your credit score with BMO’s Creditview Credit Score Checker.
Be sure to stay alert for any pre-approval offers coming your way, whether via email, phone or in-person at the local branch of your bank. And stay appraised of BMO’s credit card products by visiting our website so you know which ones will suit you best when an offer is made.
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