On Credit Karma, you’ll see offers for financial products such as credit cards and personal loans. You might see a pre-approved or pre-qualified offer, or Approval Odds on an offer.
So what’s the difference?
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. And remember, the application will result in a hard inquiry.
Much like pre-approval, 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.
What about a Mortgage? Looking and applying for a mortgage has different considerations.
Credit Karma's Approval Odds
In order to determine Approval Odds, Credit Karma looks at how your credit profile compares to Credit Karma members who were approved for the same product.
Approval Odds are our prediction of the probability that you’ll be approved for a specific credit card or a loan from a specific lender. Of course, there’s no such thing as a sure thing, but knowing whether your Approval Odds are Excellent, Very good, Good, Fair or Poor may help you narrow down your choices.
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 rate at which you’ll be charged for borrowing the money.
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 don’t worry – 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 loan, you’ll ultimately have to apply for it directly with the lender— and opt into the hard inquiry that goes along with it.