What is pre-approval and how does it work?

Learn more about what it means to be 'pre-approved' for a credit card or loan and how you can improve your chances of being pre-approved.

• Pre-approval means a lender has reviewed your basic financial information and believes you may be likely to qualify for their product
• It's different from pre-qualification and typically involves a more thorough review of your finances, though it's not a guarantee of final approval
• Pre-approved offers can apply to credit cards, personal loans, and mortgages, each with their own specific requirements
• The process usually involves a soft credit check, which won't affect your credit score
• You can check your likelihood of pre-approval and compare credit offers through services like ClearScore

If you’re shown as pre-approved for a credit card or loan, it means the lender has assessed the information available (usually including a soft credit search) and is indicating you’re very likely to be accepted if you apply.

Pre-approval isn’t a guarantee. Final approval can still depend on the lender’s full application checks, including verifying your details and completing any required fraud and affordability checks.

Guaranteed interest rates

Some pre-approved offers may include a guaranteed APR. Where the APR is representative, but your own APR could be different.

This is useful because usually, credit card and loan providers advertise their 'representative' or 'typical' APR, which is the rate at least 51% of accepted applicants will get, but not necessarily the one you’ll get when you apply.

Guaranteed credit limits

For some credit cards, you may see a guaranteed credit limit. This means the provider is indicating the credit limit you see is the limit they intend to offer if you apply, subject to final checks such as verification and fraud prevention.

Often, credit limits are used by lenders to manage risk. If they think someone could be risky, they might approve their application but give them a much lower credit limit. But with a guaranteed limit, you’ll know what you’re getting.

Exclusive to ClearScore

Sometimes, banks and lenders offer pre-approved deals that are exclusive to ClearScore customers. New to ClearScore? Sign up today for free

The pre-approval process begins when the lender gathers information about your financial situation. They'll typically look at factors like your income, existing debts, credit score, and spending habits. Most importantly, they usually do this through what's called a "soft credit check."

A soft credit check allows lenders to see your credit information without affecting your credit score. This is different from a "hard credit check," which happens when you formally apply for credit and can temporarily lower your score.

Based on this review, the lender decides whether to offer you pre-approval. If they do, they'll tell you the maximum amount you could potentially borrow and sometimes the interest rate you might receive.

How pre-approval works with ClearScore?

When you browse your offers on ClearScore, banks and lenders send us up-to-date eligibility (likelihood) information based on your current details. This is typically done using a soft credit search, so it won’t affect your credit score.

If everything on your credit report looks good, and you can clearly afford to repay the credit, a lender might tell us that you’re pre-approved.

Lenders use the information you’ve given us in your ClearScore account, such as your current address, salary, employment status and who you bank with, to come to this decision. So it’s important that you keep all of these details up to date.

Next step: check to see if your details are correct in your ClearScore account.

There are two simple ways to improve your eligibility and see more pre-approved credit cards and loans.

The first is boosting your credit score by working on your credit report. Simple steps such as making regular credit card payments and lowering the amount of credit you use can make a big difference to your credit score.

The second is to show that your income can easily cover your debt repayments. You can do this by paying off debts and postponing any big purchases until after you’ve applied for credit.

Your ClearScore offers are updated based on your credit profile, so it’s always worth checking back in to see if you have any new pre-approved offers.

Soft credit checks

Most pre-approval processes use soft credit checks. These allow lenders to review your credit history without impacting your credit score. You can have multiple soft credit checks without any negative effects on your financial standing.

Soft checks show lenders your payment history, current debts, and overall credit profile. This gives them enough information to decide whether to offer pre-approval without committing to a formal application.

Hard credit checks

Hard credit checks happen when you formally apply for credit. Unlike soft checks, these can temporarily lower your credit score and stay on your credit report. This is why pre-approval can be valuable. It gives you an indication of acceptance without the impact of a hard check.

Related reading: Understanding credit checks: hard searches and soft searches

Pre-approval is not a guarantee of final approval. It's an indication that you're likely to be accepted based on the information the lender has reviewed. However, several factors could affect the final decision:

• Changes in your financial situation between pre-approval and application
• More detailed verification of your income and expenses
• Additional checks required for the specific product
• Changes in the lender's criteria or available funds

Think of pre-approval as a strong indication rather than a promise. While pre-approval indicates you may be suitable for the product, final approval depends on comprehensive checks and is not guaranteed.

Evaluating offers

When you receive pre-approval offers, compare them carefully. Look beyond the headline rates and consider:

• The total cost of borrowing, including fees
• How long any promotional rates last
• The flexibility of repayment terms
• Whether the product fits your specific needs

Don't feel pressured to accept the first offer you receive. Pre-approval gives you the opportunity to shop around and compare options.

Avoiding common mistakes

Some people see pre-approval as a reason to borrow more than they need. Remember that just because you're pre-approved for a certain amount doesn't mean you should borrow the full sum. Only borrow what you can comfortably afford to repay.

Also, be aware that pre-approval offers have expiry dates. If you're interested in an offer, don't leave it too long to apply, as your circumstances or the lender's criteria might change.

ClearScore shows you which credit products you may be likely to be pre-approved for based on your credit profile. You can see your eligibility and compare offers for different credit cards and loans without affecting your credit score. This helps you understand your options before applying and may increase your chances of acceptance.

With free access to your credit score and report, you can track your progress and spot opportunities to grow your financial well-being. ClearScore gives you the tools and tips to improve your score, helping you build confidence and take control of your next big financial step.

Remember that credit products involve borrowing money, which must be repaid with interest, and missed payments can affect your credit rating.

Know where you stand with Triple Lock

With ClearScore, you could be pre-approved* for credit cards and loans.

• Be pre-approved – pre-approval doesn’t guarantee acceptance. If you pass the lender’s checks and your information on ClearScore is correct, you’re more likely to get the credit card or loan.
• Your interest rates are guaranteed – the APR you see is what you’ll get.
• The amount you borrow is guaranteed – you’ll know how much you can borrow before you apply.

Note: Pre-approval doesn’t always guarantee acceptance. Pre-approval means that if all your details on ClearScore are correct and you pass lender checks, you’re more likely to be approved for the product.

What does pre-approved mean on ClearScore? When ClearScore shows you're pre-approved for a product, it means the lender has reviewed your credit profile and indicates you’re very likely to be accepted if you apply, based on a soft credit search and the information available at the time. Final approval can still depend on the lender’s full application checks.

Can I be pre-approved without applying? You might receive marketing offers that suggest you’re likely to be eligible, without making a full application. However, final approval still requires a full application and the lender’s checks.

How long does pre-approval last? How long pre-approval lasts varies by lender and product. Some offers may expire after a set period, and eligibility can change if your circumstances or the lender’s criteria change. After this period, you'd need to go through the process again as your financial situation may have changed.

Does pre-approval affect my credit score? No, the pre-approval process usually involves a soft credit check, which doesn't affect your credit score. However, if you decide to formally apply, this will involve a hard credit check.

What's the difference between pre-approved and pre-qualified? Pre-approval typically involves a more thorough review of your finances and credit history, while pre-qualification is usually based on basic information you provide. Pre-approval generally gives you a better indication of likely acceptance.

Can I get pre-approved for multiple products? Yes, you can be pre-approved for several different credit products at the same time. This is because the process uses soft credit checks, which don't impact your score.

What should I do if I'm not pre-approved? If you're not receiving pre-approval offers, focus on improving your credit score and financial profile. Pay bills on time, reduce existing debts, and check your credit report for any errors that might be affecting your score.

How can ClearScore help me understand my pre-approval chances? ClearScore shows you personalised offers and eligibility ratings for different credit products. You can see which products you're most likely to be accepted for, helping you make informed decisions about where to apply.

This article provides general information only and does not constitute financial advice. Individual circumstances vary, and you may wish to seek independent advice before making financial decisions. Information is accurate at the time of writing and may change.