I Didn’t Know This About American Express: Usually No Credit Pull Unless They Approve You?

One Mile at a Time shared something I didn’t know about American Express’ approval process.

Apparently if you are an existing American Express cardmember and apply for another Amex card, your credit won’t initially be pulled. Instead Amex uses whatever data they have on file for you at first to do a soft pull to determine if you qualify. Then after you’ve been conditionally approved for a new card they actually do a hard pull, to confirm that there haven’t been any major changes (at which point you could still be denied, but it’s unlikely unless there have been major changes).

This suggests that most of the time, if you’re an existing American Express cardmember and you apply for another American Express card, you won’t have your credit pulled unless you’re going to be approved.

Here’s a 2015 Frequent Miler post making the same point, and Doctor of Credit suggests that Barclaycard does the same thing.

I’m not sure that I much care. My credit score is good, I’m not about to go into the mortgage market, I’m not “maxing out my hard pulls” as it were. But for people who worry about have their credit pulled, or ‘wasting’ a pull, this seems good to know.

As I’ve written, each time your credit gets pulled it may fall a few points. Of course signing up for credit can increase your score by giving you more available unused credit (and thus reducing your ‘utilization ratio’). Getting a new account can also reduce your score by reducing the average age of your accounts. Whether a new card has a positive or a negative affect on your credit depends on several things about your existing credit profile.

Fundamentally though, pay your bills on time and over time you’ll simply have a good score. In fact I consider my score to be in many ways ‘too high’ after all I don’t get better mortgage rates than if it were in the high 700s.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Not sure I understand the difference. Ultimately, you are likely to get a hard pull unless you have bad credit already.

  2. I was approved for two Amex cards in the last 2 years and I have no Amex credit hard pulls on my credit reports.

  3. Nothing new. They don’t even pull you at all these days. Numerous DPs, including my normal Gold charge card got approved without a HP at all.

  4. “(and thus reducing your ‘utilization ratio’)” — Similar claim was made at OMAAT, but, technically, what one wants to decrease or reduce is the “debt-to-credit” ratio (or maximize its inverse), and not reduce ‘utilization’ ratio. Using one’s credit cards a lot can, in fact, make one attractive to lenders! I ‘utilize’ my credit cards rather heavily, as I seldom pay cash even for small items. However, my “debt-to-credit” ratio is usually 2% or less [and a FICO of 810+] because I always pay my CC bills in full and on time.

    Truth is, lenders, especially CC issuers, just love to extend credit to people with a high ‘utilization ratio’ and low ‘debt-to-credit’ ratio! After I spent heavily on my AMEX Surpass on revenue stays/incidentals at Hilton hotels toward the end of last year and during my month-long holiday in Asia and kept making payments to replenish the funds even before I got the monthly bill, AMEX sent me the following offer in an email: “In recognition of your excellent history with American Express, we’d like to offer you the opportunity to increase your credit limit by $6,000 on the above account.” That’s after they approved me with an initial CL of ‘just’ $10K…

    Credit line increases are usually not extended to consumers with low ‘utilization ratios’. 🙂

  5. This was a very non click bait headline and I appreciate it. As always it’s your blog to do with as you like but just wanted to express my opinion. Take with a grain of salt.

  6. @Gary — prove it. Better yet, try me. The FICO formulae are so trivial to grasp everyone and their dog write about them on their websites.

    The point I made, complete with a real example, is clear. ‘Utilization ratio’, cannot possibly mean what you think it means. Ratio to what or of what? People with low ‘utilization’ and high credit lines are denied additional credit because lenders feel that they do not need any more since they use (utilize) very little of what they already have. On the other hand, because people with high utilization and low debt-to-credit ratio demonstrate that they use their credit extensively AND responsibly, as reflected in their low debt in relation to their total credit line, lenders consider them ideal borrowers.

    I am not responsible if you picked up street lingo and think that it means something when it does not, and reflects confusion instead

  7. @DCS You ignore proof or simply offer #alternativefacts, there’s no conceivable threshold of proof that seems to move you off a position no matter how untenable, in general I’ve taken to simply scanning your comments for personal attacks that may need to be deleted but otherwise no longer read them through.

  8. @Jim — The ‘+’ in 810+ was meant to say AT LEAST 810 for a score that fluctuates quite a bit. I will be happy to send it you, but when I was approved for the CSR, Chase did state in the approval letter the reasons for the approval, one of which was that my FICO score at the time was 840. That was back in October, before I went on a year-end vacation during which I spent enough to increase my debt-to-credit ratio from 0% (meaning less than 1%) to about 2% , which dropped my FICO score to 820 (TransUnion) and 814 (Equifax). Everything has now been paid off so I expect my score rebound in a month or two.

  9. @Gary — Please address the points raised and not throw a smoke screen with the now tired “alternative facts” canard. Not reading my comments through explains why most of your responses, including the ones above, are non-sequiturs and you keep peddling repeatedly and publicly debunked claims!

    G’day.

  10. @DSC Credit Utilization Ratio is your total balance carried divided by your total available credit. It has nothing to do with using and paying off your account. Using your cards and utilizing your cards are not the same.

    In your example utilization and debt to credit ratio are the same thing. You using your cards and paying them off is no different than not having a balance.

  11. @Tony — Credit utilization ratio and debt-to-credit ratio can be the same thing. However, from pragmatic or practical point of view, the important metric to lenders is UTILIZATION of credit and debt-to-credit ratio because, together, they tell them (a) that one is using one’s current credit sufficiently to justify extending them more credit, and (b) that one is using that credit responsibly by paying their bills.

    This should not be too hard to understand, as there are many examples of people with excellent FICO scores who have been denied additional credit, and the reason has invariably been that they did not seem to need more credit since they were not using much of the credit that they already had.

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