It is possible for you to apply for as many as 10 credit cards in just 10 minutes, online, thanks to websites that with ridiculously easy to fill forms. While applying is easy, getting approved is a whole different ballgame altogether.
Below, you will learn how to get approved for a credit card.
Stay in your league!
One of the best ways to apply for a credit card that you will be approved for is to apply for a card with requirements that match your credit score and profile. The best credit cards, the one with very low interest rates and lucrative reward programs are cards that will almost always require you to have a credit score of at least 720 or more.
Having a lower credit score and still applying for such credit cards is almost a sure-shot way to be denied. Remember, being denied for credit cards will negatively affect your credit score. Even applying for credit scores actually dents your credit score, as they result in credit inquiries that deduct a small number of points from your score. Therefore, it is imperative that you only apply for credit cards that you think you have a very good chance of being approved for.
Average credit scores run between 630 and 690 and you have a pretty decent chance of qualifying for most of the non-elite cards in the market. Always read through a credit card application page’s FAQ or terms and conditions to find out what credit scores are deemed “satisfactory”. If the minimum score they require is higher than your credit score, simply pass on the card as there is less than 1% chance you will be approved for it.
Many smart money-savvy people have actually waited for their credit score to improve before they actually apply for a credit card that they really want. You should ideally follow the same approach. You will find tips on the same below.
Take steps to improve your credit score
This isn’t an instant step, but, with a few months of time, you can increase your credit score and increase it fast. First off, take a look at your credit report to see if there are errors that are unfairly weighing down your credit score. Erroneously reported missed, late or delinquent payments can really hurt your credit score. Sometimes, fixing such errors might be as easy as making a phone call, a phone call that can increase your score by even a whopping 100 points!
You can also try to pay off more of your existing debt to improve your debt to income ratios. The lesser debt you have, the more chances of getting approved for a new credit card. But remember, don’t close other credit cards before applying for a new one. Though closing credit cards after bringing down the balances to zero sounds like a good advice, it is actually advantageous when you pay off those credit cards but continue keep balances at zero, thereby making your debt utilization ratio more appealing than before.
State all your incomes
Every credit card application page will ask you to quote your income. Now, please note that it is imperative that you do not fudge your income when entering data in such a field. But, if you earn an income beside just what you earn from your job, make sure to include it on the form. Of course, remember that all your stated sources of income need to be incomes that are reflected in your tax filing as well. Wrongly entered income figures to obtain a credit card is actually a punishable offence, resulting in Million dollar fines and even significant jail time!
So, be calculative and include all income, but without any kind of exaggeration whatsoever.
When a credit card issuer reviews your application for a credit card, almost 80% of their decision is influenced by your credit score and credit history. But, income can constitute a large part of the remaining 20% that decides the fate of your application. In touch and go application cases, a good income can tip the scale in your favor.
Follow up if you are denied
A rejection email or denial in your mailbox doesn’t mean that you should lose all hope about availing a particular credit card. You can follow up to see if they will reconsider your application. Call customer service of the credit card and give them your application number and politely ask why you were denied. Tell them you like their credit card and what it offers and that you want to know if there is any information you can offer that might change their mind.
If you have a savings or checking account with the bank that issues a credit card, mention it. Leverage things like good relationships with your existing credit card issuers, a recently improved credit score or even the willingness to balance transfer your balances from your older credit cards. They are all factors that can tip the application back in your favor.
Remember, most credit card issuers never manually look at credit card applications. They use computer programs to screen applications based on various factors, like the ones discussed in this post. For example, a credit card issuer might be automatically denying applications that show that a person may have 3 or more credit cards. But, if this is the reason why you were denied and you do actually have 3 or more credit cards, but with very little balances or no balances, a credit card issuer will be more than willing to give you their credit card, as you now not just an acceptable customer but a desirable one!
If denied for a credit card, search for the following in Google or other search engines; “XXX (Bank Name) credit card reconsideration line”. If you can’t find a specific reconsideration line, try the general line and ask to speak with a customer service representative. It might be more difficult and likely to be a dead-end, but the only way to give you another chance at approval, after being officially denied for a credit card.
Ask the right people about a card that will be right for you!
Sometimes, successfully applying for a credit card is as simple as knowing which one to apply for. We are not just talking about a card that requires the right credit score, as discussed in the first point, but a card that matches your overall profile.
Let me give you an example. I used to study with a lot of international students when I did my MBA. International students hardly had any sort of credit score or even a credit history for that matter. In fact, most of them got a social security number just weeks before they wanted a credit card. The previous years’ international students had done their fair bit of applying and being denied. Among all the trial and error, many had discovered that American Express, quite surprisingly actually, was approving international students for the American Express Blue Student credit card with handsome credit limits, sometimes as high as $1,000. The newer incoming students took their advice and applied for the same card and were almost always approved.
So, sometimes it is about asking the right people about what card to apply for, in order to be approved.