Ever apply for a credit card and get declined? Not only was it disappointing to not get the card, but your credit score also took a minor hit because a hard inquiry on your credit report was used by the card issuer to make the decision.
That’s why it’s generally a good idea to do some research before you apply for a credit card so that you’re reasonably sure you’ll meet the issuer’s eligibility criteria. To help take some of that guesswork and risk out of the process, Experian recently announced a new enhancement to its credit card matching service. No Ding Decline saves your credit score from a dip if you are initially declined for a participating card.
[Read: Best Credit Cards for Fair Credit.]
How Experian No Ding Decline Works
To try it out, you’ll need to share the last four digits of your Social Security number with Experian, along with your mobile number. You’ll be texted a verification code that you will then enter to get started.
Next, Experian will show you a list of credit cards that you should qualify for based on your credit report data — and some of those cards may be designated as No Ding cards. If you apply for one of those selections directly through Experian and are declined right away, your credit score will not be affected.
The Fine Print
Experian says around 70% of consumers have financial profiles that should generate No Ding options — but not everyone using the Experian Marketplace will receive No Ding Decline card offers.
It’s important to note that if your application is ultimately approved, the bank will perform a hard inquiry, which can in fact cause a minor score decrease. This is also true for those who may be initially approved but then declined during the final verification process.
Therefore, the actual benefit of Experian’s No Ding Decline feature is that consumers get to avoid the double whammy of being declined up front and experiencing a score drop as a result of the application.
[Read: Best Credit Cards for Good Credit.]
Other Ways to Test the Credit Card Waters
If you’re credit card shopping but are concerned about how that could impact your credit score, the good news is that many card issuers make it standard practice to offer preapproval or prequalification using just a soft pull of your credit. However, their processes vary, and all of their cards may not be included.
Does It Really Matter?
Your credit score is delicate in that various behaviors can make it fluctuate, including any time there is a new inquiry on your credit. According to FICO, “new credit” makes up 10% of the credit score calculation and includes any time you apply for a credit card.
In most cases, a temporary small drop in your score is no big deal. However, if you know that you’ll be going for a large loan like a mortgage, a small decrease in credit score could bump you down and impact your interest rate or ability to get the loan. In other words, timing is important.
In any event, your score will usually recover within a few months of the card inquiry, assuming your other behaviors are positive.
If you are trying to make credit score improvements to qualify for a particular product or low interest rate, though, even a few points matter. That’s when something like Experian’s No Ding Decline (as well as issuer-specific prequalification features) could come in handy. Such services can offer confidence — and in Experian’s case, a guarantee — that you won’t be penalized for targeting cards that you ultimately don’t qualify for.
More from U.S. News
Dear Clever Credit: I’m in College. What Should My Next Credit Card Be?
Dear Clever Credit: I Travel a Lot for Work. What Credit Card Should I Use?
Dear Clever Credit: I’m a Gamer. What Credit Card Will Level Up My Spending?
Should You Try Experian’s No Ding Decline? originally appeared on usnews.com
