One of the most recognizable names in the credit card industry -- American Express -- offers credit cards to fit a variety of needs: from premium travel cards to cash-back cards to business rewards cards. But with top cards requiring a good to excellent credit score, you might be weary about a hard credit check.
Prequalification can help you gauge your chances of approval without damaging your credit. If you’re interested in an American Express card -- which generally have higher credit recommendations -- you can use Amex’s tool to match you with cards based on a soft pull of your credit and other financial information, which won’t ding your credit score, before you formally apply.
However, if you’re prequalified and choose to officially apply for the card, American Express will conduct a hard credit check, which can lower your credit score by a few points. Here’s how it works.
What is credit card prequalification and how does it work?
Getting prequalified doesn’t guarantee you’ll be approved for a credit card, but it indicates that you may have a good chance. To determine prequalification, a credit card issuer uses some basic financial information, such as your credit score and payment history, to screen your eligibility for one of its credit cards. You may receive a prescreened offer from a credit card company in the mail, or you can check to see if you are prequalified online.
Prequalification or preapproval usually comes with a soft credit check, which doesn’t affect your credit score. American Express will request some information about your financial profile from the three major credit bureaus: Equifax, TransUnion and Experian.
If you decide to apply for a credit card after receiving a prequalification notice, you must submit a formal application and provide more information such as your income, Social Security number and monthly rent or mortgage expenses. When you officially apply, American Express will conduct a hard credit inquiry. Hard inquiries typically drop your credit score a few points, so consider your options before jumping at a preapproval offer.
What’s the difference between preapproval and prequalification?
When it comes to credit cards, preapproval and prequalification are often used interchangeably and mostly depend on the issuer. But in some cases, they may indicate different things.
Preapproval could indicate a more extensive process where the credit card issuer worked with a credit bureau to match you with a specific card. Because the credit card company had access to more in-depth information, preapproval could mean you have a greater chance of being approved. Prequalification could refer to a more superficial review done independently by a credit card company.
There’s also a third term, preselection, which indicates the lowest chances of approval. Neither preapproval, prequalification, nor preselection guarantee approval.
How to increase your chances of prequalification
The higher your credit score, the more likely you are to be prequalified or preapproved for a credit card. You can do several things to improve your credit score before undergoing the preapproval process, such as consistently paying your credit card or loan payments on time and in full.
If you don’t have any credit to pay off, consider a credit builder loan or a secured credit card. Both products are designed to help rebuild or establish credit scores and don’t have high credit requirements to qualify. A secured credit card would also give you access to a credit line, which contributes to your credit utilization -- how much debt you hold versus how much credit you have available. You should strive for a credit utilization below 30%, to keep your credit score healthy.
How to get prequalified for an American Express credit card
You can check to see if you’re prequalified for an Amex card by visiting its website.
You might also receive targeted preapproval offers via your mailbox or email. Additionally, you could also contact American Express directly to see if you are prequalified for any of its cards. Keep in mind prequalification doesn’t mean you’re guaranteed to be approved for the card. It’s more so a way to gauge eligibility.
Once you’re prequalified, you can apply for the card securely online. You’ll need to provide additional information, but Amex usually approves or denies credit applications quickly. Again, applying will involve a hard credit inquiry, which typically will temporarily ding your credit score by a few points.
Should you see if you’re prequalified for a Amex credit card?
Consider checking your prequalification odds if you’re interested in an Amex card. It’s a useful tool that can help you gauge your approval chances before undergoing a hard credit check. American Express credit cards generally have high credit requirements, so it’ll help you avoid any unnecessary hits to your credit score.
The bottom line
Checking your eligibility for credit card preapproval or prequalification can give you an accurate indication of your chance of approval without a hard credit inquiry, which will affect your credit score.
Most card issuers like American Express, Citi, Capital One and Discover will let you check prequalification eligibility online or with targeted ads sent electronically or in the mail.
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