If you’ve read Netbanker a bit, you know I can get pretty excited at just about any new and shiny bit of fintech. So if you went only by my blog posts, it might be hard to differentiate between a cool new feature and a major strategic disruption. 

Well, take note, this is one of the big ones if Capital One can deliver on the promise. And that is a very important caveat. The card giant better be able to fulfill cards to the vast majority of those it prequalifies online or it will have legions of disgruntled applicants.

What the company has done is place a pre-qualification form between its online ads (see banner running on TechCrunch below) and the full application. The form asks for name, mail address, and last four digits of the Social Security Number, plus two multiple-choice questions about desired features and credit self-evaluation. 

The whole process can be completed in as little as 35 seconds (in my test it took 24 seconds to fill in the blanks; 8 seconds for the results to be displayed).

Importance: Credit-savvy consumers, about the only ones who’ll be approved these days, know that every credit application negatively impacts their credit score, at least temporarily. Therefore, many are hesitant to complete an online app if they think there’s a chance they won’t be approved. Being able to test your creditworthiness (note 1) without a credit bureau hit is a powerful incentive to move consumers into the sales process.

The other advantage of this system is that even if you don’t complete the full application after the pre-qual, Capital One has captured your name, address, and a positive match with your SSN. So they can hit you with followups in the near future. However, I am surprised the company doesn’t ask for your email address. It must have dampened response in testing. 

Capital One banner ad across TechCrunch (17 Nov. 2010)

Landing page emphasizing the lack of risk to your credit score (link)

Pre-qualification form

Results page with a recommended card and two alternatives
Note: I indicated a preference for travel rewards in the pre-qualification form.

Online application
Note: Users must start over as none of the pre-qualification form info is transferred over

Notes:
1. At the end of the pre-qualification process, the company only says you are “pre-qualified.” There is no guarantee you’ll get the card or credit limit you want.
2. For more on online lending, consult our previous OBR reports:
– Online Lending v5.0 (part 1) (Nov. 2005)
– Online Lending v5 (part 2) (Jan. 2006)