Along with the benefits someone gains once they are approved for the card, we’ve seen a growing trend of more control being given to consumers before they apply as well with expanding prequalification tools rolling out – according to Comscore’s Digital Custom Behavioral data, visitation on issuer sites to these tools grew to over 110 million visits in 2023 and over 25 million in the first quarter of 2024.

Prequalification tools (including preapproval tools) and features allow consumers to learn whether or not they will be approved for a credit card before they complete a full application and endure a hard pull on their credit report. If a consumer is declined for a credit card, the hard pull on the credit report is often considered to be wasted, potentially impacting the consumer’s score for the 2 years that it remains on their report. Some tools give consumers a list of cards they will likely be approved for, while others tell a consumer whether or not they will be approved for a specific card.

Early Adopters and Innovators

In 2019 Apple and Goldman Sachs debuted a novel approach to a credit card application where consumers would complete part of an application, see what their offer for the credit card would be, then choose whether to proceed with the hard pull to accept the offer. Fast forward to 2024 and more than 7 of the top credit card issuers offer a consumer-facing prequalification process. American Express has rolled out an approach similar to Apple over the last 2 years with their Apply with Confidence experience where consumers can start an application and learn after a soft pull with 100% certainty whether or not they will be approved for the card. Recently, American Express even rolled this experience out to its business credit cards.

Capital One is a leader in the prequalification space, driving both premium and credit building card shoppers to pre-approval pages. Capital One’s leading credit card Paid Search advertisement drove to the pre-approval experience, emphasizing the issuer’s focus on driving applicants through the tool. Capital One’s pre-approval experience allows consumers to enter information and see a list of cards they will likely be approved for if they choose to apply.

Wide Reaching Impact

Prequalification has grown to account for 20-30% of non-affiliate referred digital credit card applications according to Comscore Digital Data. As many as 65% of an issuer’s applicants came from prequalification – reach out to use to find out who! Prequalification may be a win-win for consumers and issuers. For consumers, they won’t be upset when they are declined for a card that does not require a hard pull that sticks around for 2 years. Some issuers even suggest other cards consumers could try applying for instead. For issuers, prequalification can help prevent paying for hard pulls and unqualified applicants and prequalification may help avoid erosions of brand favorability by providing that anticipated decision earlier in the process.

Key Takeaways:

This emerging trend puts more control in the hands of consumers and can help maintain relationships with consumers who are declined for a credit card. We’ve seen the growth of prequalification in the auto lending space as well, as instant decisioning has caused the shopping journey to evolve.

Reach out to us here to delve deeper into where in the purchase path prequalification fits, consumer perception of prequalification, or brand-specific data on strategy, performance, and marketing.