Are those pre approved credit card offers in the mail real
The pre-approved credit card offers you receive in the mail can be a bit confusing. Here's the lowdown:
What are pre-approved credit card offers?
Pre-approved credit card offers are letters or emails that you receive from credit card issuers, stating that you've been pre-approved for a credit card with a specific credit limit and interest rate. These offers are often sent to individuals who have a good credit score and meet certain criteria.
Are they really pre-approved?
Not always. While the offers may say "pre-approved," they're often more like "pre-qualified" or "pre-screened." This means that the credit card issuer has reviewed your credit report and determined that you're likely to be approved for a credit card, but they still need to verify your identity and creditworthiness before issuing the card.
How do credit card issuers determine who gets pre-approved offers?
Credit card issuers use complex algorithms to analyze your credit report, credit score, and other factors to determine who receives pre-approved offers. They may look at:
- Credit score: A good credit score (usually 700+ FICO) can increase your chances of receiving a pre-approved offer.
- Credit history: A long credit history with a mix of credit types (e.g., credit cards, loans, mortgages) can be a positive factor.
- Income: Higher income can be a factor, as it indicates a greater ability to repay debt.
- Credit utilization: Keeping your credit utilization ratio (credit used vs. credit available) low can help you receive a pre-approved offer.
- Demographic information: Your age, location, and other demographic factors can also influence your chances of receiving a pre-approved offer.
What should you do with pre-approved credit card offers?
If you receive a pre-approved credit card offer, you can:
- Accept the offer: If you're interested in the credit card, you can apply online or by phone to receive the card.
- Decline the offer: If you're not interested, you can simply decline the offer and shred the letter.
- Negotiate the terms: If you're interested in the credit card but want better terms (e.g., a lower interest rate), you can try negotiating with the credit card issuer.
Remember, even if you're pre-approved, the credit card issuer still needs to verify your identity and creditworthiness before issuing the card.