Is it possible to find guaranteed credit card offers?

When you apply for a credit card, you don’t know whether you’ll be approved for it or not. It depends on the criteria the lender uses for assessing applicants. However, you can check which cards you might be eligible for before you make an application. This process increases your chances of success when you do apply. Checking your eligibility in advance also allows you to protect your credit score, which can be damaged by multiple applications.

What does pre-approved mean?

When you’re pre-approved for a credit card, it means the provider has already confirmed you’re eligible for the card before you formally apply for it. As a result, you’re unlikely to be turned down when you make an application.

The reason pre-approval protects your credit score is that it avoids too many ‘hard’ searches appearing on your credit report. ‘Hard’ searches are recorded when you formally apply for credit. Each application prompts the provider concerned to check your credit report to view your track record of borrowing and repaying money. These ‘hard’ searches are recorded on your credit report and are visible to other lenders for 12 months. 

Unfortunately, having too many hard searches on your credit report can make it appear that you’re having financial difficulties or are overly reliant on credit, which makes lenders less keen to accept your application. Ultimately, multiple hard searches hurt your credit score and make it harder to get credit in the future. This situation can arise when you apply for several credit cards over a short space of time. 

However, when a credit card provider checks your eligibility to decide whether it will pre-approve you, it only performs a ‘soft’ search of your credit report. These can’t be seen by other lenders and so don’t affect your credit score. 

When you are pre-approved, you are usually told the APR (the interest rate you pay on any borrowing) and the credit limit you’ll get if your application is successful. (The specifics of your offer depend on your circumstances.) Knowing the APR and credit limit you’ll get can help you decide which card to apply for.

How does pre-approval work?

To be pre-approved for a card, you need to enter some details on the provider’s website. These are likely to include your:

• Personal details, such as your name and date of birth

• Addresses from the last two or three years and other contact details

• Residential status

• Employment and income details

You may also be asked to give your bank account number and sort code.

You’ll then be given a list of cards you’re eligible for, along with their interest rates and other features. The list is based on the provider's lending criteria and assessment of your credit score. Once you’ve selected the card you want from the list, you can make a full application.

Comparison sites also have eligibility checkers. These tools allow you to see credit cards from a range of providers for you’re likely to be approved if you apply. These eligibility checkers work in a similar way to the ones on providers’ websites but enable you to be pre-approved for cards from more than one company. Additionally, you may have to enter extra information on a comparison site for it to give you a list of cards that suit your needs. 

Try Uswitch’s eligibility checker

Could you be rejected for a pre-approved credit card?

Pre-approval gives you a high degree of certainty about whether you’ll be accepted for a particular credit card or not. However, the ultimate decision depends on the information you enter when you make your formal application and the card provider’s detailed assessment of your circumstances. This could include information it already has about you if you’re an existing customer.

You may be asked to provide more information in your application than you did when you checked your eligibility. The provider will also carry out a hard search of your credit report. 

You could be turned down if you:

• Don’t give the same details on your application as you gave during the pre-approval process, or the information can’t be verified

• Don’t pass ID and fraud checks

• Give information on your application that doesn’t match that on your credit report

• Have previously been a customer of the provider and the details it holds about you contradict those you gave during the pre-approval process

Note: It's a good idea to check your credit reports from the three credit reference agencies (Experian, Equifax and TransUnion) before you apply for credit to make sure the information on them is accurate and up to date.

What can you do if you are rejected for a credit card?

If you’re refused a credit card, don’t panic. Being refused by one provider doesn’t mean that you won’t be approved by another. However, you should avoid making too many applications for credit in a short space of time – no more than two or three every few months is a good guideline. In the meantime, it’s worth spending some time investigating why you may have been rejected and taking steps to improve your chance of success next time you apply. 

You might not be told why your application was rejected but common reasons include:

• Failed ID check: The provider was unable to verify your identity and address

• No credit history: If you don’t have enough of a credit history, the provider can’t check whether you’re likely to repay your debts

• Poor credit history: This could be because you’ve missed payments or defaulted on loans. A poor credit history could make the provider think that you’re a risky customer to take on 

• Too many applications: You have applied for credit multiple times over a short period, which can suggest you’re struggling financially

• Incorrect information: Your application contained errors

• Ineligibility: You don’t meet the credit card provider’s specific lending criteria or are not part of its target market

There are things you can do to rectify some of these. These include:

• Registering to vote

• Making sure there’s no incorrect information on your credit reports

• Building up your credit history by using a credit builder credit card

• Reducing any existing debts so you’re using less of your available credit

• Shopping around for a credit card that suits your circumstances

It’s a good idea to wait for at least three months before applying again.

Read more …

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