Prequalification's for credit cards Part 1.
Updated: Feb 3, 2020
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For Part 1 we will cover Discover credit card pre-approvals!
I picked Discover to be first because of some new and exciting changes.
Now I’ll be completely honest, discover was never a credit card that we would recommend for our clients & I would have never recommended Discover for close friends either.
Reason being was because of their very conservative limits, I also noticed them to be very bias in age.
For Ex. Older applicants with short history would “unofficially” be a red flag.
Probably since credit repair has been popular. This means that some companies may become suspicious of seeing a 40 something year old with 2 years of history lol. Now could that happen? yes but again Credit Repair is big nowadays and has been allowing consumers a chance to start all over again. The odds of a very short history for a middle age consumer is low so of course that can be a red flag!
Now although a short history may be in their eyes suspicious in middle age consumers, they seem to love young adults straight out of high school/college. Yes, they have little or no history but the reason why is obvious.
So, here’s the kicker if you were ever denied for a discover credit card in the past or given a low limit, you may want to give them a chance again!
Chances are your approval odds have drastically changed!
We’ve seen a significant change in approvals & higher starting limits (based upon average discover starting limits) and figured that this is definitely worth sharing!
KEY POINT: Whenever there’s a change in executives there is usually a good or bad outcome. In this case David Nelms the previous Discover CEO leaving, turned out to be good.
Now although we will include a link to check for prequalification’s we wanted to also share more information on approval odds & also how to increase them!
Things Discover doesn't like:
· Too many new accounts (more than 5 in 24 months) (More than 2 in the last 6 months)
· Past derogatory accounts with Discover
· Frozen credit reports (Unfreeze them before applying)
· Recent derogatory items reporting this includes Collections, Charge offs, Repossession's etc
· Too many recent inquiries (try to allow 6 months to pass without applying for new credit)
· High Usage (Over 30%PER card)
· Discover has been known to report weekly on some accounts which means if you had high usage and you need your new balance to report, you typically do not need to wait for another month. You can also call and request them to update your balances with the credit bureaus pretty easily.
· Free FICO score monthly. For cardholders they provide Transunion and for non-cardholders you still can create a free account to have monthly access to your Experian FICO score
· US customer service number 24/7 so this means no out of country outsourcing
· Account Freeze. What this means is that if you believe you lost your credit card but not quite ready to cancel and order a new one, you can instantly put a freeze on your card until you find it.
· No annual fees. Discover credit cards do not carry any annual fees
· Discover may not be accepted everywhere. In fact, Visa and Mastercard are accepted almost everywhere but there are unfortunately some countries or establishments that do not accept Discover
· You are only allowed to own Two Discover credit cards at once. You can apply for your second Discover credit card after 12 months of being approved for your first card.
· Hard credit pulls when requesting a high limit increase (soft pulls for small credit limit increases)
Average Credit Score Approval Although other factors may be included is a *FICO 08
Lowest Reported Score Approval for their premium credit cards (Not Secured) *FICO 08 VERSION* 648
Average starting limit for fair credit $3,000
Average starting limit for good credit between $6,000-$9,000
Average starting limit for excellent credit $10,000-$12,000
Average starting limit for exceptional credit $20,000
Starting limits can be determined good or bad depending on the lender and how conservative they are. Based upon Discover being a very conservative lender, being approved for $8000 or above is great start & can grow if you take care of the account and your credit!
On a scale of 1-5, here's our overall rating for Discover credit cards.
· Ease of application/approval 3.0 (Requesting proof of identity is common which can delay final processing)
· Starting limits overall 3.5
· Customer Service 5.0
· Design of credit cards 4.5
· Benefits & Fees 4.0
Ready to check to see if you’re Pre-Approved? Click the link below as their approval odds are known to be very accurate.
If you get a solid Apr% let’s say 18% then that’s a good sign.
If you get a Apr% range for example like 16-25% then that’s not as accurate.
If you get a Apr% under 19% they like your profile & may offer a great starting limit.
If you receive a Apr% of 25% then you are barely making the cut. This may possibly mean you have a great score but thin file. Your chances of a low starting limit is high!
One thing to consider lately is Discover will more than likely pull 1 bureau for soft pulls and a different credit bureau for the initial application decision which means you may have great chances on the pre-approval but still denied.
You want to fully examine your reports and find out what’s hurting your score, change it then come back.
For instance, usage over 30%. Bring all balances under 30% each but even lower is better. Wait until all of the balances are reported to the credit bureaus which is typically once per month. Then apply!
Discover will either soft pull Equifax for the pre-approval and hard pull Experian or vice versa also it depends on where you live.
Lately we noticed Discover pulling Experian a lot on the east coast which is uncommon but possibly may have to do with the new CEO.
Check if you qualify below & share your outcome.
Checking for Prequalification’s will be a soft pull that doesn’t affect your score or reports,
Only if you actually decide to apply is when you would receive a hard pull.
If you do not receive a pre- approval at all, make sure you do not have a fraud alert on your credit reports.
If denied then no worries, continue to work on your current credit circumstances to have a better outcome!!!
If you are looking to enroll in credit repair, click the link below!