Whether you’re applying for your first Credit Card or if you’re adding a new one to your kitty, let’s find out what are the odds of you getting approved for a Credit Card!
Do you have a bunch of Credit Cards in your wallet? Or, is this is your first one? Irrespective of whether you’re a seasoned Credit Card user or you’re applying for a card for the first time, you’ll need to consider which card will be perfect for your needs and ways to improve your chances of getting approved for that card.
Well, simply put, the higher your Credit Score is, the better chance you stand of getting approved for a Credit Card. This is where your credit history comes in. Your Credit Score is a result of your credit profile. Confused? Read on.
Additional Reading: What Do Numbers On Your Credit Card Really Mean?
Your credit profile is a summary of your credit behaviour. What we mean is, your credit profile is determined by your credit history. Now, you may ask, how is this important? Well, potential lenders such as Credit Card companies and banks consider your credit history to determine your creditworthiness and your ability to pay bills.
Now, you must know that not all Credit cards are the same. They are designed to suit different requirements and are aligned with different lifestyles. For instance, there are rewards cards, travel cards, balance transfer cards, cards with exclusive dining discounts and more. These are meant for customers with varying needs and credit profiles.
If you’re a Credit Card newbie, we’ve compiled a few pointers to keep in mind when applying for a card.
Don’t get carried away
Just grabbing every opportunity to apply for a Credit Card can lower your chances of approval. This is because if you’re turned down for some of the cards, it will lower your score and ruin your chances of approval in the future.
Moreover, the more applications you submit, the more you’ll end up looking desperate for credit. Besides, did you know that when a prospective lender checks your score, there’s a slight drop in it. This is called a hard enquiry!
Pro tip: When you check your score yourself, it qualifies as a soft enquiry and does not lower your score! Don’t know what your score is? Check your Experian Credit Score for FREE and in under less than 3 minutes!
Additional Reading: Best Ways To Get Rid Of That Scary Credit Card Debt
Pay Attention To Your Credit History
Your credit history is a record of your debts such as unpaid credit card bills, home mortgages, and Personal Loan EMIs. We suggest you develop a habit of scrutinising your credit history to track your credit behaviour. If your Credit Score is low, the answer probably lies in your credit report.
Make sure you go over your credit history before applying for a Credit Card. Lenders look into factors such as late payments, missed deadlines, the number of accounts you hold, the age of your credit accounts, credit card utilization, and the number of hard enquiries made by you.
It’s of utmost importance that you ensure that your credit report is error free and absolutely accurate. Make sure to check if there are any incorrect details of foreclosures or bankruptcies mentioned in your report. If there happens to be an error, immediately file a dispute with your card provider.
Additional Reading: How To Read A Credit Card Statement
Say Goodbye To Debt
Studies have shown that emerging debt-free is the first step to improving your financial health. In case you have the bandwidth to liquidate one of your assets for debt repayment, it won’t take away a huge portion of your monthly paycheck. Make sure to have as little debt or outstanding balance as possible before applying for a credit card. This is one of the ways to ensure that you have a higher chances of approval.
Pay off the long-term debts and reduce the outstanding short-term debt immediately. You can even consider taking a Personal Loan to repay your debt.
Additional Reading: Handling Debts 101: Ways To Become Debt-Free
Regularly Track Your Credit Score
Your Credit Score is perhaps the most important factor that comes into play when determining your chances of getting approved for loan or a Credit Card.
Your Credit Score can be any number in the range of 300 to 900. A number above 750+ indicates that you have about 85.5% chances of getting approved for the card. A high score reflects better credit decisions and portrays you as more creditworthy in the eyes of the lender.
A low score is the surest sign of irresponsible credit behaviour. Don’t panic if your score is not high. There are many ways to improve it. For starters, paying your bills on time and in full is a good way to boost your Credit Score.
Additional Reading: 4 Factors That Determine Your Credit Card Limit
Choose As Per Your Needs
While there’s a horde of options available for you to pick from, choosing the appropriate card can be quite confusing. Before applying, make sure to check your Credit Score to see if it is not low.
Compare different types of Credit Cards to see which one suits your finances the most. You can even pick a card depending on the kind of expenses you generally make. Whether it is a standard Credit Card with a basic rewards structure or a premium one with exclusive benefits and complimentary services, take a look at the features of the cards before applying.
Additional Reading: The Best Credit Card For Each Income Group
If you have not been approved for a Credit Card, don’t lose heart already. There’s a lot you can do to raise your odds of getting approved. One of the sure shot ways is to build your Credit Score by paying your bills on time and in full.
Interested in picking a card for yourself? We’ve got a bunch of them for you to pick from!