Hi. I'm not in bankruptcy, and in fact believe I can avoid it (though
I was concerned enough about my local economic situation around the
first of the year that I subscribed to this group).

I've been watching posts and finding out about our credit scores, and
mine has suffered some (though it still is in the mid-600s, but still
enough for my interest rates to be higher). And I've seen too that the
more credit one applies for, the lower the score can be because of
applying. 

Well, I recently got a "pre-approved" offer for a Conoco gas card. Can
anyone tell me how that will affect my credit rating now, if I go
ahead and take it?

Thanks in advance, for any replies to this and to all the other
wonderful, informative posts here in this group!

A "pre-approved" credit card offer does not mean anything. 
"Pre-approved" simply means that you have NOT been approved, so you
are "pre-approved".

When you get the credit card offers that are "post-approved" then you've got
something! ;-)

On 4 May 2004 16:36:37 -0700, klm_kim@yahoo.com (K Kim) wrote:

>A "pre-approved" credit card offer does not mean anything. 
>"Pre-approved" simply means that you have NOT been approved, so you
>are "pre-approved".


Actually, I think you're thinking of the term "pre-qualified". In all
of my credit cards (which have built up to quite a few), pre-approved
meant just that... approved for the card beforehand (with stipulations
in case any of my credit history took a turn for the unexpected from
the time they sent the pre-approval to the time I return it signed). 

In other words, I'm almost sure that, given nothing has changed in my
immediate credit history, if I sign and send in the "pre-approved"
form, they'll send me their card. It's a Conoco card, so it's a big,
reputable company. I'm just wondering that if I do this, will it then
affect my rating because I did it. (I know from reading this group
that when the "B" type loan companies send such "pre-approved" offers
and you take them, that that in and of itself tells the credit bureaus
you were "hard up" and bit the bait for a higher-interest loan. I just
don't know if that's the case with this Conoco card.

Your thoughts, appreciated greatly.

I think you're mistaken on this one.  I've yet to received ANY of the
"pre-approved" credit card applications that I have signed and sent back, or
gone online with the "pre-approval code".  I believe once you sign the
application, they are then authorized to pull your FULL credit report.
Prior to that, all they can really get is your credit score and a few minor
details when they go trolling for new applicants.

Maybe true for most people with excellent credit history and for you.

However, there are many cases that a "pre-approved" person was denied
credits after that person filled out the application and after the
credit card company does the credit check.  In fact, I can promise you
that your perspective credit card company will do credit check on you
to decide your credit rating after you have filled out your
"pre-approved" application.

I do not think there is any difference between "pre-qualified" and
"pre-approved".

http://www.askmen.com/money/investing/26_investing.html

We all know that it is difficult to get a new credit card without any
background credit history check, which is why most people get excited
when they receive a pre-approved credit card offer in the mail.

Most people don't even think twice about the offer and send in their
"pre-approved" application form, duly filled out. Unfortunately, they
have no idea that the offer is really a gimmick used by credit card
companies to get people to apply for a card with less favorable terms.

pre-approve this...  

Credit card companies use tricky tactics to mislead people into
thinking they've been accepted by using confusing wording such as
"pre-approved."

Think about it for a minute. If you really qualified for the credit
card, you wouldn't get a "pre-approved" form; you would get an
automatic approval letter or better yet, the actual credit card in the
mail.

When it comes down to credit card applications, there are two possible
outcomes; either you're approved or you're not. Therefore, being
"pre-approved" is the equivalent of "unapproved." Do you see the
linguistic confusion?

Everyone is basically pre-approved for everything as it signifies the
state which one is in prior to being approved. So technically, you
have been pre-approved for a credit card from the day you were born.

Now that you've been "pre-approved," all you have to do is apply to
get official approval. Are you still following me?

who's fooling who? 

Credit card companies have a lot of cash to lend to people, but they
won't just give it away to anyone. First, banks receive a list
consisting of all those who fit the criteria specified by the bank
from credit bureaus. The bank then sends its pre-approved offers with
enticing terms.

When you send in this application, the bank runs another credit check.
If your credit situation has changed negatively, chances are you'll be
offered a card with a lower credit limit and a higher interest rate.

What about the enticing "pre-approved" terms? Well, those were terms
set out before you were approved (hence pre-approved). But after
reviewing your credit rating, credit card companies will adjust the
terms to better match your needs (or theirs, as the case may be). You
can bet that the re-adjusted terms will be less favorable than the
ones originally offered.

my mama told me... 

If you receive a "pre-approved" application in your mailbox, I highly
suggest that you throw it away. If you've already applied for a credit
card and did not obtain the rate you wanted, cut up the card and
return it along with a letter of explanation. The bank is likely to
offer you a better deal.

If you want a credit card, you don't have to wait for the banks to
send you an invitation. By shopping around, you have a greater chance
of finding a better deal than the one offered in the mail.

If you want to avoid the "pre-approval" gimmick and want a quick
response, a great credit card that offers a great rewards program, as
well as safe online and offline shopping, check out the Next Card by
Visa.

the best rates in town 

The problem with shopping for a credit card is that you only know the
exact interest rate once you open the account -- pretty much the
equivalent of buying a car without knowing its price.

Would you ever commit yourself to buying a product without knowing the
price? Of course not, so before you make your final decision, do some
research and make sure the credit card plan is best suited to your
lifestyle.
 

> [snipped some]
>
> Think about it for a minute. If you really qualified for the credit
> card, you wouldn't get a "pre-approved" form; you would get an
> automatic approval letter or better yet, the actual credit card in the
> mail.
>

Nope, not legal in the US to send a cc without having the applicant's
signature first.

[snipped some]
>
> The problem with shopping for a credit card is that you only know the
> exact interest rate once you open the account -- pretty much the
> equivalent of buying a car without knowing its price.
>

Don't forget to include the annual fee and application fee when calculating
what the card actually costs you.

Personally, I have sent some such preapprovals back, with a note:  "Please
resubmit with no annual fee, no application fee and an APR of xx."  But,
only if they are paying the postage...
 

You are adding more credit, so your score will probably go down. 
Bureaus like to see a "mix" of credit, rather then several of one
type; i.e., credit cards.  About 3 cards is probably the max, then
maybe a car loan, installment loan, mortgage--you get the picture.

If you really want this card and can at all pay off any other
balances, do so.  Go to www.creditboard.com and post in the credit
forum there.  Those folks really know their stuff when it comes to
scoring.  They've helped us raise our scores over 100 points in under
a year.