Doing This One Thing Can Help Protect Your Credit Score

Keeping your credit score healthy is part of keeping your finances on track, and there are several ways you can build and maintain a good credit score. Doing this one thing, when necessary, will really help too.

Check if you are eligible for any new credit cards, before you apply.

Generally when you apply for a credit card, the provider will run hard check to find out what your credit score is. Unfortunately this will usually result in your credit score going down, regardless of whether you’re offered the card and end up taking it. It won’t take a huge hit, so applying for a new card (or any other credit) once in a while is fine.

But what if you’re shopping around for a new card? One thing you don’t want to do is just apply to all those you fancy, see which ones you can get, and then take the best of the bunch. You only want to apply for a new card (and go through that hard credit check) if you definitely want that card, and can be fairly sure you’re going to get it.

How Do I Get Pre-approved for a Credit Card?

You may well have had marketing mail (or emails) land in your lap telling you you’re pre-approved for a great new card. Pre-approval means the provider has already accessed your credit details and you are highly likely to get the card if you apply. So that’s great, right? Maybe, but not always.

There are no guarantees that you’ll get a card, even if pre-approved. The offer you’ve received may be based on a soft pull, or on information the provider already holds, which is why you’re likely to get pre-approval offers from a bank or organzsation you already deal with, or have previously applied for credit with. The offer will generally be based on the most recent information they hold on you.

If you apply, however,  there will be a hard check and the provider may well take a much closer look at your credit history and your current situation. If there are issues, or recent changes, that you know about but the provider doesn’t, you might want to hold off on applying for that particular card.

It’s also good to remember that providers proactively contacting existing or potential customers with credit card offers is a marketing tactic. They want to ‘sell’ this card to you, which means there’s a benefit to them. Check the terms carefully. These cards may come with a high annual fee, APR, or late fee. You’ll generally do better by doing your own research and finding a specific card that meets your needs.

If you’re in the market for a new card, and the card you’re pre-approved for does meet your needs, and you’re confident the information that you’ve been pre-approved on is up-to-date and accurate, you’re fairly safe applying for it. Just be aware that pre-approved does NOT mean guaranteed. Your application could still get rejected.

How Do I Pre-qualify for a Credit Card?

Pre-qualifying is subtly different from getting pre-approved, though in practice they mean much the same thing. You can often check if you pre-qualify for a card during the research process, and there are tools that allow you to see all the cards that you pre-qualify for.

If you have an account at a major credit agency such as Experian (which also allows you to monitor your credit score, and suggests ways to improve it) they will let you know if your score changes and you now pre-qualify for more cards.

Alternatively, many card providers have a tool on their website where you can put in some preliminary information and they will do a soft check on your information to see if you pre-qualify. If you do you’ll still have to go through the whole application process, including a hard check which will be more thorough.

Most pre-qualifying checks are soft checks and won’t affect your credit score, but always check that this is stated before using any kind of pre-qualifying tool. Just like pre-approval, pre-qualification is no guarantee your application will be accepted. Even when pre-approved or pre-qualified for a card, only ever apply for them one at a time. That way, even if you get rejected, your credit score will only take a small hit.

Remember, the more attractive cards have a higher lending criteria. So don’t be seduced by general marketing campaigns and apply for cards that simply require a higher score, or income, than you currently have. Take the steps to at least ensure you’re applying for a card you’re eligible for before you put that application in.

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen