Pre-approved offers in mail legit?

In some very rare instances (and I mean VERY RARE), pre-approved means pre-approved, without any inquiries. Normally you need to have an account already established with whomever it is sending you the offer. However, pre-approved simply means that you've been pre-approved to APPLY, and nothing more. They're still gonna pull an inquiry on you. CapOne is notorious for sending outrageously good offers, then sticking you with a $300 CL for starters (a Platinum card with a $300 limit? get real!). And at the cost of THREE hards, no less!

So, to answer your question, no, they're not "for real". And yes, it IS possible to be denied.

 

Pre-approved offers are the result of PRM inquiries, usually.

Essentially the only thing that they received was your name, address, and possibly phone #; and maybe a little bit more than that. But nothing 'DIRECTLY' relating to your specific credit report.

The emphasis is DIRECTLY...

When they contacted the CRA to get their mailing list, they could literally specify enough information that they have a 50/50 picture of your credit file.

They could for example request, consumers who have at least 4 credit card accounts, all with perfect payment histories for the past 2 years, with a total credit limit for their credit card accounts of $25,000+.

Gee, if they know you have at least 4 credit card accounts with a perfect payment history, and at least $25,000.00 in credit limits, they have more than enough of a snap-shot of your credit report *BEFORE* pulling an inquiry.

If you're interested in learning more, snoop around the FTC web site for an 80+ page PDF which provides even scarier examples than this example.

 

I don't believe any of them. I get them in the mail too, but when I apply, I am denied.

here is why I am denied....


Evidence of being seriously late or having derogatory indicators/remarks on your credit obligations is being reported on your credit file

There is evidence of multiple accounts with missing payments or having derogatory indicators/remarks reported

The time since your most recent past due payment is too recent or unknown
(was 7 months ago)

The proportion of balances to credit limits (high credit) on your revolving/charge accounts is too high

I have about 400 dollars in credit card debt (on my main card that is a 2500 dollar limit) all the rest are 300 dollar limits with a 0 balance... So WTF is this about?

 

As others have said, you aren't truly pre-approved. Also, the credit limits lsted are alays the maximum credit limit you can get - you are likely to get something lower (generally inline with other cards you have).

I am personally 3 for 4 when responding to pre-approved offers. In the one case where I was turned down (Capitol One), I later found out that their collection arm had purchased a very old (8 years, so beyond the SOL and not on my credit report), charged off debt. My guess is the credit report looked fine, but they had this other info in their system on me.

 

Pre-approved offers are based on a soft inquiry from the potential creditor. They are able to see the accounts you have now, whether you have any derogs and I believe the limits on your accounts.
"Pre-approved" is usually much better than applying cold. The creditor already has a snapshot of your history. Many who are declined after sending in pre-approved offers usually have had some kind of change to their reports since the soft was pulled (ie: more inquiries, new accounts, derogs appearing, larger increases from current creditors, etc.). In addition, job length and salary are also a factor in approvals. This info is not part of our credit bureau files.

Pre-qualified on the other hand are simply lists potential creditors received from the major credit bureaus. The bureaus compile a list of customers they feel would fit the profile a particular creditor is looking for. Approval with these is definitely a shot in the dark.

My personal experience with pre-approvals has been very positive. I have not had one pre-approval declined. However, I don't apply frequently for different accounts so my credit file doesn't change much.

 

I disagree here based on personal experience. I had a pre-approved offer from BofA. The offer said "apply and receive 'up to $5K'". Well, I applied AND submitted a BT with the app of $4500 and was approved for $7500. So much for "up to"... In some, if not most instances, a creditor will give you a higher CL if you are willing to transfer your balances over to them. I know it's that way with Chase and BofA.