If you are looking for a new credit card, you may have received pre-approved credit card offers. These offers are based on a pre-screening of your credit record that shows you may be eligible for a specific credit card. However, how do these pre-approvals influence your credit score? Let us find out.
What is a pre-approved credit card?
If you need a credit card, you generally have to apply for it. Pre-approved credit cards are those that are offered to you after a soft credit inquiry. Soft inquiries are used for verification and do not affect your credit score. Financial firms use soft inquiries to present you with pre-approved credit card offers that you can use to meet your financial needs.
If a financial firm such as a bank believes you are eligible for a specific credit card, they will contact you with a pre-approved offer. In case you are interested in any of these offers, please note that these offers may have an expiration date. Although pre-approved offers do not guarantee approval, you are more likely to get final approval if you fulfil the basic requirements.
Advantages of pre-approved credit cards
Pre-approved credit card offers have various advantages that make them worth considering. Some of the advantages include:
- Attractive sign-up bonuses or vouchers
- Waivers on annual credit card fees for a limited period or the lifetime of the credit card
- Promotional rewards incentives for additional points on spending
- High credit limit as per eligibility
If you already have a credit card, explore the benefits of the pre-approved credit card to see how it can help. You can use the reward points on your new card to buy flight tickets or redeem them for an appliance you wish to buy. That will add to your savings. Timely repayment of the credit card bills will keep your credit health in good shape.
Another way to monitor and improve your credit health is using the Bajaj Finserv Credit Pass. It is a subscription service that gives you monthly CIBIL Score checks, a personalised credit dashboard, and more.
Impact of pre-approved credit card offers on your credit score
You may not need the additional credit provided by the pre-approved credit card at the moment. In case you do not have a credit card, it is good to have one. If you plan to go for it, avoid overusing the card limit. Excessive use of credit with delayed or missed credit payments can lead to bad credit health. Responsible usage of one or more credit cards can be good for building your credit score.
Pre-approved credit card offers are wonderful resources for those seeking a new credit card. These offers include a soft credit inquiry that does not affect your credit score and provides various benefits to those who qualify for them. You may improve your chances of receiving pre-approved credit card offers by managing your credit carefully and sensibly.
How to improve your chances of credit card pre-approval
Improving your credit score increases your chances of receiving pre-approved credit card offers. Here are some suggestions to boost your credit score:
- Avoid maxing out your existing credit cards.
- Pay existing credit card bills and loan EMIs on time.
- Limit the number of credit accounts that you open or close. Your credit portfolio should be diverse, and it should indicate that you use your credit responsibly.
Using these strategies can help you improve your credit score and raise your chances of receiving pre-approved credit card offers. Check your CIBIL Score to know your credit health status. A score of 750 or higher is considered a good CIBIL Score. Then, work on improving it. The better your credit score, the better will be the pre-approved credit card offers that are likely to come your way.
