Instant decision credit cards are all very different. They may fall within any number of other credit card categories from Air mile to Zero APR, but they have one unifying attribute which makes them a popular choice for applicants – An instant decision (or response) on credit card applications.
In terms of credit cards ‘instant’ could actually take up to 2 minutes, but relative to historic norms (where credit card applications could take days or weeks to process) the processing of applications is very quick.
When assessing applications credit card issuers use numerous data sources and sophisticated models to determine who they accept or reject. But, although the calculations involved can be complex, the vast majority of the processing is automated.
Some issuers still use people to process applications manually, but these are a minority of applicants, usually where an automated decision is not clear-cut.
Of course, automating the application process requires the data that supports the mathematical models for ‘decisioning’ to be available. Credit reports, sourced from credit reference agencies, are an essential part of the process. If an issuer’s link to a credit reference agency is down, then they lose their ability to offer instant decisions.
It is also true that some issuers will not approve applications during certain periods, as they are more exposed to fraud. Applications made from around midnight to six in the morning will often be ‘referred’ and ‘decisioned’ later during working hours, or when more support is available to identify unusual activity.
Nevertheless, in all cases, a decision (or response) regarding the status of the application is made, whether that is to accept, decline or refer application for further consideration.
A number of credit card issuers now offer soft search eligibility checkers to help applicants assess their chances of being accepted before they make a full application. Although these tools are incredibly useful, most do not offer what would be a pre-approval for a product.
Most eligibility checkers only assess a single credit report that individuals could obtain from one of the three credit reference agencies and match the publicly available credit score against details shared by issuers about likely acceptance. However, most credit card issuers use more than one credit reference agency to obtain the credit reports they use in determining how the treat an individual applicant.
The data supplied by the reference agencies is only one (albeit important) part of the data sourced to ‘decision’ applicants, and the publicly available data is not the same data that issuers receive from credit bureaus.
Regardless of whether an instant decision is available (in many instances it is) processing of the card still takes some time and the card cannot be used until it has been activated (to help prevent fraud).
Under normal circumstances, it takes around 4 or 5 days for the physical card to arrive in the post.
Bad credit credit card applications were amongst the first in the UK to offer and promote the fact that they could offer instant responses on credit card applications. That does not mean that all bad credit issuers now offer instant ‘decisioning’, but many do.
Nevertheless, it is possible that people with bad credit more to fear from instant decisions than others might. Where it once took days to get a response, individuals had time to reflect upon the wisdom of additional applications. With responses now available in a matter of seconds, it is perhaps tempting for those declined to instantly apply for an alternative product – not recognising that multiple applications in short succession are likely to have a profoundly negative effect on their credit score.