Pre-approved vs Application?

matte134

I recently applied for a credit card and got declined and have a few questions regarding the process. 

So i was 100% pre-approved for this credit card on all 3 credit reference agencies (using TotallyMoney, Credit Karma, Clearscore, Credibility and Experian). I even checked the credit card website eligibility checker and was pre-approved on there too. 

I applied through Credibility, and on the application it asked 2 questions: are my circumstances going to change - answered no and am I in a debt management or iva - answered no. It then asked me to verify my phone number, email and bank account - all checked ok. It then states:

When you submit your application, we use your info to:

• Check your eligibility again with the credit reference agencies, and let them know you've applied for a credit card. This will go on your credit file.

• Do our fraud prevention and identity checks. Depending on what comes back, there's a small chance we won't be able to open your account.

Which is all standard. However I was declined. I have since contacted the company and asked for all the data used in the decision of the application, which they have provided (after a lot of back and forth). This is my personal details, income and expenditure from Credibility (where I applied through), my credit report from Transunion and bank verification and fraud indicators (which they wouldnt share). 

The only differences between the data that is used for the pre-approval (soft credit check) and the application (hard credit check) are the bank verification and fraud indicators, yet they are saying i was declined due to affordability. My question is how can I be pre-approved using my credit data then declined using the same data in the application? 

It's been about 2 months since I made the application and ever since I am still pre-approved on all three credit agencies and their website.

Desmond_Hume

You’re pre-approved by the CRA on what they think banks will look at and use. Ultimately though, the CRAs don’t lend the money and their guess is just that, a guess. 

The banks will look at your info, history etc and mix in their risk appetite. This is what really matters. You’re not going to find out why they said no either. 

In short, the difference is one group (CRAs) make their best guess based on your info. The banks make a definitive decision. And that’s the one that counts. 

matte134

But then if the bank did the eligibility check with a soft credit check, which exposes my credit report and pre-approved from that, why would they then run the check again in the application and decline?

NorwichMan

If you are pre-approved this does not mean you will automatically be accepted for the card when you apply. 

https://www.experian.co.uk/consumer/credit-cards/guides/what-is-pre-approval.html