What is prequal?
What does it mean to “prequalify” for a loan or a credit card?
If you’ve received a notice from a bank or other lender saying that you’ve prequalified for one of their products, it sounds like a firm promise that you’ll definitely get the loan or credit card if you apply. But getting prequalified for a financial product is far from a final decision about whether or not you’ll actually get approved for it. If you’ve been prequalified for a loan or credit card, you should think of it as a “soft yes” to your application, not a firm one.
That “soft yes” comes from a preliminary review of your personal and financial information, including a soft check of your credit. Because the bank or lender isn’t doing a detailed analysis of your credit, income, and debt-to-income ratio during the prequalification process, it is unable to say with certainty whether or not you’re definitely a good candidate for the financial product.
NerdWallet currently offers prequalification tools to help consumers better understand their likelihood of qualifying for certain financial products. Again, though, it’s important to keep in mind that getting prequalified for one of these products is not a guarantee that you’ll be approved by the lender when you submit your full application.
What’s the point of prequalifying for a loan or credit card? Why not just submit an application directly with a bank or lender?
Every time you apply for credit (think, loans and credit cards) a hard check of your credit is performed. This will give the lender you’re applying with a detailed look at your credit history, to help it determine whether or not you’re a good candidate for the product you’ve applied for. This can sometimes generate a firm yes or no decision about whether you’re approved within minutes of your application.
The drawback is that a hard check of your credit will cause your credit score to drop. For example, if you submit several credit card applications in a short period of time, hoping to get approved for one of them, this could have a substantial, negative impact on your credit score.
This is where a prequalification tool can come in handy. You’ll submit a few basic pieces of information about yourself and your finances, and you can find out whether you’re prequalified for a credit card or loan based on that information. Since no hard check of your credit is performed in the process, you can get a sense of whether or not you’ll be approved for a product without losing any points on your credit score. This will help you make informed choices about which loans or credit cards you should submit formal applications for.
What are prequalification decisions based on?
Every lender is looking for different qualities in its borrowers, so there’s no hard-and-fast set of criteria that every lender is using when it makes a prequalification decision.
Generally, though, the bank or lender will need to review the following to determine if you prequalify for a personal loan or credit card:
- Your credit (based on a soft review of your credit report).
- Your income.
- Your age and citizenship status.
- Your other debts and monthly financial obligations.
- Your employment status.
- The reason you’d like to borrow (for personal loans).
Are you selling my information to banks when I use a prequalification tool on NerdWallet?
No. NerdWallet does not sell your information to third parties for marketing purposes.
NerdWallet works with some of the biggest names in the credit card and loans markets to offer our members good options as they select financial products. In order to get a personalized, realistic sense of what your options are, NerdWallet will need to share your prequalification application with these partners to see if one is willing to prequalify you for a loan or credit card. The information is not being sold, just shared with our partners so that they can review it and (hopefully) make you a personalized offer.
I’ve been prequalified for a loan or a credit card. Now what?
If you’ve been prequalified with one of our partners, the next step is to finish the full application for the product you’re interested in. The steps for doing this are explained in the email you received that told you you were prequalified.
Just keep in mind that it’s still possible you’ll get rejected for the product. Again, prequalifying for a loan or credit card is not a guarantee that you’ll get approved when your full application for the product is reviewed by the lender.
What happens if I don’t prequalify for a loan or credit card?
If you haven’t been prequalified for a loan or credit card right now, there’s nothing else you need to do for the moment. You may receive what’s known as an “adverse action” notice from one of our lending partners with whom you did not prequalify, formally notifying you that your application was not approved. Don’t be alarmed if you receive an adverse action notice - again, it’s just a formality, and does not mean that a hard review of your credit was performed.
You can try again in 30 days to prequalify for a credit card or loan. If you’d like personalized advice about how to prepare to prequalify, please send our Nerds a note on this page with as many details as possible about your financial status and the type of product you’d like to prequalify for. (To protect your privacy and security, they can’t see the information you entered on your prequalification form, so you’ll need to provide some details about yourself in your email). They’ll be happy to help however they can!
You can also check out these resources for more help with improving your chances of prequalifying in the future:
How much does it cost for Billshark to negotiate my bills?
If Billshark is unable to find any savings, then you will not be charged for the service. For any savings that are found, NerdWallet has negotiated a special rate for our members only: 35% of your savings from your first year. (To compare, regular Billshark members are charged 40% of their savings from their first two years).
As an example, if your savings total up to be $100 in your first year, and another $100 in your second year, Billshark will take just $35 (35% of your first year savings) as a negotiation fee.
Savings may only be found for one year or may be higher in the first year than in subsequent years.
How much money could I save from Billshark’s services?
NerdWallet members save up to $60 a month on their bills.
What if I change my mind and want to cancel the Billshark negotiations?
As a reminder, Billshark will never change or extend your contract without your permission.
If you want to cancel your request, email Billshark at email@example.com within 24 hours after submitting your bill information. After 24 hours, negotiations will have started, and you’ll be unable to make any changes.
Can I negotiate my own bills instead of having Billshark do it?
The short answer is, yes - you can contact your service providers directly.
That being said, studies have shown that it generally takes an average person at least 30 minutes to negotiate a single bill on their own. It can also take additional legwork to know if you’re getting the best rates and current promotions.
This means that having several bills might take you upwards of hours to negotiate.
Billshark has had enough experience to know what rates you should be getting from your providers, and what negotiation tactics to use. It takes you just 2 minutes to get started, and Billshark will do the rest of the work for you.
Where can I learn more about Billshark and their bill negotiation process?
Feel free to visit Billshark’s own FAQ page, which lists a number of other frequently asked questions, as well as gives you a way to chat with a Billshark representative during business hours: https://www.billshark.com/support/
How long does the Billshark negotiation process take?
Billshark takes an average of 3-5 business days to finish negotiating a bill. You’ll receive a notification once negotiations have been completed. In the meantime, you can check on the progress by logging into your NerdWallet account.
How secure is linking my accounts?
We take the protection of your confidential information seriously. NerdWallet has built its products based on best practices and industry standards.
Additionally, it’s important to note that NerdWallet does not sell your account information with third parties, nor do NerdWallet employees have the ability to see or access your account details.
How can I request new features?
We love hearing feature requests from our members! Feel free to send them over to us, and we’ll pass it over to our product team.
Some of my transactions are not showing up. How do I get this fixed?
The first thing to note is that pending transactions might not show up on your account until they are posted (finalized) with the merchant’s bank. This usually happens within a couple days, but sometimes may take longer. To check if the transaction is posted and finalized, you'll want to log into your financial institution's account and review your running transactions.
Our platform also updates nightly, so some transactions that are finalized during the day may not show up until the following day.
If a transaction has posted for more than a day and is still not showing up on your account, please try unlinking your account, and then linking it again. If this still doesn’t work, send us a message with details (including any screenshots, if possible), and we’ll get our engineering team to take a look!
I’m seeing a transaction that I didn’t make in my account. Why is this showing up?
The information you see in your account comes directly from the financial institution that you linked with NerdWallet. If you’re seeing a transaction that you don’t recognize, we recommend checking your statement on the financial institution’s own website, and contacting them directly if you believe that the charge is not valid.
If you are seeing a transaction on your NerdWallet account, but cannot find it on your financial institution’s statement, please contact us with details. We’ll investigate!
How do I delete a transaction?
The transactions you see are categorized by date of occurrence across all of your linked accounts, and should reflect the same information you might see if you were to log into those accounts individually. There’s currently no way to delete or remove transactions from the transaction portion of our tool, but our team is considering the feature for future updates. Feel free to send us any feature requests, and we’ll pass it along!
I’m running into problems linking my Capital One account. What do I do?
If you’re having some trouble connecting your Capital One account, it’s likely because you’ll need to request an Access Code from Capital One before they allow NerdWallet to access your transaction information.
To get this Access Code, first sign into your Capital One account, and then take the following steps:
- Click the tab labeled “My Info”
- Under “Preferences”, click “Access Code”
- Click the button labeled “Create”
- Enter the code generated when requested in your NerdWallet account
How do I submit feedback to NerdWallet?
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How can I find out more about this company listed on my credit report?
For privacy and security reasons, we can’t see what’s on your credit report. You can try doing a quick online search for the company’s contact information.
What is this mark on my credit report?
Our credit report information comes directly from TransUnion, so if you want more details, check out their Credit Report Guide.
Why did my score drop?
Each credit bureau calculates scores in a different way, and we can't know exactly which factors they looked at or weighed more heavily than others. But here are a list of common things that could have caused a change:
- Closing or opening credit cards
- Applying for loans
- Using more of your available credit than you were before
- Maxing out your cards
- Sending an account into collections
Here is more information on why your score may have dropped. And don’t forget to check your credit info for errors.
When will my credit score be updated?
The short answer is that your credit score could be updated as much as once a week.
The long answer is that we pull our data from TransUnion, our credit report partner, so the score and information on your report comes directly from them. We pull that info once a week, but lenders usually report to the credit bureaus about once a month. The exact day is different from lender to lender, so we can’t always predict when accounts will be fully updated on your credit report.
Is my information secure with NerdWallet?
We take our responsibility to protect your confidential information seriously. NerdWallet has built its products based on best practices and industry standards. For example, we employ encryption, access controls, and regular testing by internal experts and third party firms to evaluate the effectiveness of our security measures to protect sensitive financial information.
What does NerdWallet do?
At NerdWallet, our mission is to provide clarity for all of life's financial decisions. We do this through financial education and empowerment, allowing people like you to make the smartest choices when it comes to issues such as choosing a credit card, insurance, or a loan. See our About Us page for more information.
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