Experian is rolling out a “no ding” program. They are promoting this as a program unique to Experian. Experian is 1 of 3 credit reporting companies that hold your credit file. This is a process that has been confusing consumers for decades.
Here is how this particular promotion works. You can apply for a credit card with a credit card offer that appears to be a match. If they decline your credit you will not be “dinged.” If you are dinged, that means they performed a “soft” pull on your credit file. That type of credit pull/credit check does not “ding” your credit. Thus you are not penalized for trying. Another example of a soft pull is when you check your credit for your own purposes, it is considered a soft pull or check.
If you have a pre-approval, then you go to the next step. This is where they perform a hard pull credit check where you will get a 3 to 4-point “ding” on your credit. This gives the credit card company a way to verify that you would be a good risk to take with credit or a DENIAL stating you wouldn’t be a good risk to take.
So you could get a “ding” for going through the credit approval process and getting denied.
The bottom line: pre-approvals look nice when you apply online and make it feel like you are accepted. With Experian’s promotion, you don’t get a “ding” or deduction on your credit report if you just initially try. However, if you get the pre-approval, take a step forward, and get a hard credit check, you could get denied once the lender sees everything on your report.
Thus, you might feel slighted if it does not work out. No one likes to apply for credit and get denied while decreasing their credit score at the same time. Remember always read the fine print. Credit card companies practice deceptive advertising all of the time.
Bob Brooks is the host of the Prudent Money Radio Show, heard every weekday from 3:00 PM - 3:30 PM on FM Radio 91.3 KDKR
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