Credit card pre-approval rates have doubled in the last month, according to new insights from Experian’s Credit Barometer.
Half (50%) of consumers searching for a new credit card through Experian’s price comparison service will now be shown a card they are pre-approved for, meaning their application should be successful.
Economic uncertainty during the COVID-19 pandemic meant many lenders re-evaluated their offers and subsequently tightened lending and affordability criteria. As a result, the number of people that saw a pre-approved card fell to one in four (24%) in July.
However, in the weeks since many business sectors in the UK re-opened, and more people returned to work, several lenders have introduced products back to the credit market.
This has led to a consumer’s chance of being approved for a credit card edging closer to levels seen before the COVID-19 lockdown. At the beginning of March, 55% of consumers searching for a credit card through Experian were shown a pre-approved card.
Amir Goshtai, Managing Director of Experian Marketplace said: “Over the past few weeks, we have seen significant improvements in the credit market. Last month we revealed that consumer eligibility for loans had improved by 60%. Now we’re seeing similar levels of growth in the credit card market, which had been impacted more by changes in lenders’ appetite for risk. Our panel of credit cards is now 50% higher than what it was a month ago, offering plenty of choice for consumers. These are all positive signs of recovery for the UK economy.
“Eligibility ratings mean people searching for credit can check their chances of approval before submitting an application – giving them confidence in applying for credit and protecting their credit score, especially during such challenging times. People looking for credit should use comparison services until they find the right product for their needs.”
People that fall within the ‘Good’ and ‘Excellent’ Experian credit score bands have seen the biggest improvement in pre-approval rates over the last month. Over two-thirds (64%) of people with a ‘Good’ Experian Credit Score will now be shown at least one card they are pre-approved for, compared to 31% at the start of July.
Eligibility ratings indicate a person’s likelihood of being approved for that credit deal. Price comparison marketplaces, such as Experian’s, provide those searching for credit with this rating information so they can be confident when applying for credit and protect their credit score from multiple credit applications.