On Credit Karma, you’ll see offers for financial products. For credit cards and personal loans,you might see a pre-approved or pre-selected offer, or Approval Odds on an offer and specific to personal loans, you might also see a pre-qualified offer.
So what’s the difference?
Credit Karma's Approval Odds
Credit Karma looks at how your credit profile compares to Credit Karma members who were approved for the same product to determine your Approval Odds as Excellent, Very Good, Good, Fair, or Poor.
Approval Odds are our prediction of the probability that you’ll be approved for a specific credit card or personal loan from a specific lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. Still, at the end of the day, it’s up to the lender to make a decision.
If you see a pre-approved badge on offers for a credit card or a personal loan, it indicates that you meet the lender’s criteria for a pre-approved offer. This means that if you apply and pass the lender’s eligibility screen, you have about a 90% chance of being approved for the offer.
You may be ineligible for the pre-approved offer if, for example:
- you don’t meet the lender’s ability to pay standard;
- you’ve been declined by the lender within the last 90 days; or
- you already have the maximum number of accounts allowed by the lender.
Pre-approval is still not a guarantee of approval. The lender will also need to verify your income and other information before you can be approved.
Remember, the application will result in a hard inquiry.
Much like being pre-approved, a pre-selected offer means that you meet certain criteria determined by the lender. This means that if you apply and pass the lender’s eligibility screen, you have about an 80% chance of being approved for the offer. The same eligibility criteria for pre-approval may apply to pre-selected offers as well.
Pre-selection is only available for personal loans and credit cards at this time. Looking and applying for a mortgage has different considerations.
Credit Karma can help you see if you have pre-qualified personal loan offers. When you’re pre-qualified for a loan offer, it means that the lender has reviewed your information and found a personalized offer for you. You’ll also see your estimated APR, which stands for Annual Percentage Rate and is the cost you’ll pay for borrowing the money each year, expressed as a percentage. The APR includes the interest rate but also fees you have to pay to get the loan.
Getting pre-qualified won’t hurt your credit. Lenders will typically run a soft inquiry on your credit to determine if they can make you a pre-qualified offer. If the lender decides that they can’t make you a pre-qualified offer, they may send you a letter or email explaining why you weren’t pre-qualified. It’s called a “Notice of Adverse Action,” but it doesn’t mean your credit was hurt.
Keep in mind that pre-qualification is not a guarantee of approval, and if you want that personal loan, you’ll ultimately have to apply for it directly with the lender— and consent to the hard inquiry that goes along with it.