The act of a lender reviewing a borrower's credit file and then issuing an initial line of credit based on the results of the report, without the borrower requesting the loan. Lenders often do pre-approvals to entice people to borrow money from their company. Credit card companies send out letters on a regular basis that provide a person with a pre-approved line of credit. If the individual completes the pre-approved application, the credit line may be reduced or increased based on any changes in the borrower's credit file.
Pre-approval offers typically do not decrease a person's credit score despite the multiple companies accessing it.

Use pre-approval in a sentence

Because of my great credit score, I had a pre-approval for the loan I needed to get in order to finance my car.

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The employee had a great job so he experienced the pre-approval process when buying a new car on credit at the dealership.

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An example of pre-approval would be.."My wife and I are hoping to buy a new house. The bank is going to look at our credit history. If we are in good-standing we should be able to get the loan that we need for a substantial down payment."

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preannouncement pre-approval letter