Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Credit is a necessary tool for Canadians to live a financially successful and healthy life. Roughly, 95% of Canadians have a credit card which is a great way to use credit and not only affords you the ability to purchase products and services in a secure manner but also helps build your credit history. Many credit cards have substantial rewards systems that offer cash back incentives when you use the card, while others have systems that offer travel points and additional benefits. When it comes to choosing the right credit card and getting approved, many credit card providers offer pre-approvals. Similar to a mortgage pre-approval, it can help you determine if you meet the necessary criteria.
Yes. Credit card companies do offer clients the option to obtain pre-approval on their cards. While there is nothing illegal about a pre-approval offer for a credit card, there are definitely some specific considerations everyone should be aware of.
Credit card companies often use pre-approved credit cards as a promotional tactic to secure more clients. A pre-approval acts as a pre-screening and allows a customer to see if they meet the credit card’s initial criteria without having to submit to a hard credit check. Some criteria a pre-approval might have include:
After the credit card company decides on pre-approval, they inform the customer and then the customer can decide whether or not they’d like to apply formally for the credit card. It’s important to note that pre-approval doesn’t indicate a full approval. Consumers will apply formally for the card after pre-approval, and the credit card company will then do a hard credit check before deciding on approval.
Pre-approved credit cards might seem like an extra layer of the process; however, they offer a few benefits.
Accepting a new form of credit helps you build your overall credit. This is especially true for newcomers to Canada, who may not have a substantial credit history yet in the country. Assuming the new credit card limit, as well as your other forms of credit, is within your financial capabilities, having a diverse portfolio of credit is great in improving your credit score.
More credit means more buying power. Life brings unpredictable events and emergencies, so having the power to spend a bit more money is a great way to feel more secure.
Prescreening through a pre-approval can save you the credit score mark of a hard credit check. Although you will need to undergo a hard credit check once you apply, the prescreening can save you the hard credit check if you aren’t able to meet the criteria.
Despite the plus sides of getting a credit card pre-approval, there are a few negative aspects that warrant consideration.
Though more credit is a plus when managed correctly, it can be detrimental to your financial health if you take on more credit than you can handle. Luckily, 70% of Canadians pay off the full balance of their credit card every month, but there are still many who struggle with making their monthly and minimum payments. It’s important to consider your financial situation honestly to assess whether or not you should apply for a new credit card.
Though a pre-approval only requires a soft credit check, you will undergo a hard credit check when you formally apply after the pre-approval. If you haven’t submitted too many loan or credit applications recently, this shouldn’t pose a problem. However, if you have applied to many credit cards and other forms of credit, this hard credit check could impact your credit score, even if only temporarily.
A pre-approval does not guarantee approval for a credit card. You might find that you gain pre-approval but once you apply for approval, you can still be rejected by the credit card company.
Pre-approval can be helpful in assessing your credit situation and evaluating your ability to take on more credit without undergoing a hard credit check. If you’re not sure you’ll be able to obtain formal approval, pre-approvals can help you learn more about the criteria you need to meet to get approved for a credit card. Make sure you understand going in that a pre-approval is just a pre-screening – it does not guarantee you a credit card.
Rating of 5/5 based on 3 votes.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Frank Mortgage is Canada’s one-stop shop for mortgages. Get up to $1,500 cash back on your mortgage.
Great unsecured credit card for customers currently in, or recently discharged from, a consumer proposal or bankruptcy
Earn an average 5%¹ cashback at thousands of partners and at least 0.5%² cashback guaranteed with Neo.
KOHO’s Credit Building Program helps you build a better credit history with easy to manage payments for just $10/month.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.