So you’ve received a letter congratulating you for getting prequalified or preapproved for a new credit card. The offer almost seems too good to be true. Just fill out the application, drop it in the mailbox, and wait a few weeks for your new card to arrive, right? Unfortunately, that’s not how it works.

Being prescreened, preselected, prequalified, or preapproved for a new line of credit does not guarantee your application will be approved by the bank or financial institution — it simply means you meet their initial requirements.

So what’s the difference between prequalified and preapproved, and are they actually meaningful? Let’s examine this phrasing to help you understand those offers when you receive them.

Credit card prequalification vs. preapproval

Although the terms are closely related, prequalified and preapproved credit card offers are not the same. If you’ve received either type of offer, it means that a lender has reviewed your credit history and determined that you’re a likely fit for its product. However, preapproved offers are often a better indicator that your credit card application will be successful.

Both of these offers effectively reveal little more than eligibility. Some banks and credit card issuers use the words "prequalified" and "preapproved" interchangeably — hence why you may occasionally receive "prequalified" correspondence through the mail.

What does prequalified mean?

The prequalification process often begins with you, the customer.

For example, many bank websites allow you to see if you’re prequalified for their best credit cards before you apply. This initial application does not require a hard credit pull (which can impact your credit score), though they may run a soft credit check. Instead, you’ll often be asked to enter your annual income and other basic financial information so the credit card issuer can assess whether you’re a good candidate for that specific credit card.

What does preapproved mean?

Preapproved credit card offers generally show up in your physical and virtual mailboxes entirely unsolicited. In some cases, you may have never even heard of the card issuer before.

With credit card preapproval, you can bet that the credit card company has more closely examined your credit report than with a prequalification. There’s a reason for this: Credit card issuers ask credit bureaus for an index of people with specific credit activity to help them narrow down worthy applicants.

This is why these card offers might appear to know you eerily well. For example, if you’ve got good credit or carrying around $10,000 in credit card debt, you could receive a mailer encouraging you to consolidate $10,000 worth of debt onto a balance transfer credit card such as the Citi® Double Cash Card or U.S. Bank Visa® Platinum Card. The bank may have specifically requested a list of those with credit card debt of around $10,000 within a specific credit range. Customers who fit the profile may receive a "preapproved" offer.

Thanks to the Fair Credit Reporting Act (FCRA), a financial institution can’t send you a preapproved offer unless it includes a "firm offer." In other words, if you are approved for the card, you’ll get the exact terms specified in the preapproval letter.

What are preselected or prescreened credit card offers?

To make matters more complicated, you may see the term "preselected" or "prescreened" in your mail. Put simply, you loosely fit a criteria the bank is trying to target. Issuers preselect customers using data similar to the preapproval process, but a successful application is less of a sure thing.

For example, a business owner may get preapproved for The American Express Blue Business Cash™ Card, but a frequent traveler may receive a letter in the mail for the American Express® Gold Card or Chase Sapphire Preferred® Card.

Do preapproved and prequalified offers affect your credit score?

Receiving preapproved and prequalified offers do not affect your credit score, but accepting the offers and submitting an application will. Here’s why.

Soft credit inquiry

Also known as a soft credit check or pull, lenders may do a soft credit pull when deciding whether to preapprove or prequalify you for a credit card. This type of inquiry does not impact your credit score.

Hard credit inquiry

A hard credit check or pull signifies to the credit bureaus that you’re actively trying to acquire new credit. You can expect your credit score to dip by a few points every time you experience a hard inquiry. This is because the credit card issuer will review how you’ve handled debt and credit in the past and use that information (along with other criteria) to decide to approve or deny you the line of credit.

For example, if you’re preapproved for a credit card, the issuer has almost certainly performed a soft inquiry on your score to see if you’re a suitable candidate. If you decide to submit an application for the card, the issuer will then perform a hard inquiry, which will temporarily lower your credit score by a few points.

Pros and cons of prequalified and preapproved offers

There are several wins that come with prequalified and preapproved offers. They’re more than just tools to help you understand your approval odds for a specific credit card.

Preselected offers also give you the ability to "rate shop." This is the act of finding the best terms on different credit cards before you commit. For example, when you prequalify for a card, the lender will often perform a soft credit inquiry and present you with ballpark interest rates based on your credit. You can do this with as many credit cards as allow for prequalification to find the option that’s best for you.

There are tradeoffs, however. The frequent junk mail can accumulate quickly. And snail mail can contain information that could potentially help a scammer to commit identity theft.

How to opt out of preapproved credit card offers

If you’d prefer to spare the square acre that’s deforested annually for the purpose of sending you garish advertisements, the FCRA offers a solution:

• Opt out electronically by visiting OptOutPrescreen.com or calling 888-567-8688. This will remove you from credit prescreening lists for five years.

• Opt out by mail (you must print and sign an opt-out election). This will remove you from credit prescreening lists permanently.

However, according to the Consumer Financial Protection Bureau, credit card issuers can still acquire your information from alternate sources and continue to target you for financial products.

From offer to approval

Your credit score and history play an important role in determining what kind of credit card offers you're eligible for. Both prequalification and preapproval offers give you an idea of your approval odds without affecting your credit score. But until you submit that credit card application and consent to a hard credit inquiry, you can’t know for sure.

Can’t decide on a credit card? Check out Yahoo’s best credit card picks

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Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn't include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.