When the first time we applying for a credit card, we may feel a little nervous. Because there is always a frustrating possibility that it will not be approved. Here is a step by step guide on how to get an approved credit card. With this guidlines you can increase your chances of success.
Step One. Check your credit
Your credit score plays a huge role in what kind of credit card you can get. Every credit card has a certain range of credit scores. You need to check your credit card to know what card you are eligible to apply for.
Fortunately, there are many free ways to get your credit score. Find one with your FICO® score, because this is the most widely used. Credit scoring tools also almost always tell you whether your score is considered bad, average, good, or excellent-and what factors are responsible for your current score.
If your credit score is lower than your expectations, then you should check all your credit reports for any errors that may affect it. Legally, you are entitled to a free credit report each year from three credit agencies, the three agencies are Equifax, Experian and TransUnion. Due to the COVID-19 virus epidemic, they will provide free weekly credit reports from April 20, 2020.
Step Two. Choose the right credit card
Choosing the right credit card is the most important part of getting approval. If you do not have a good credit or you do not have any credit history, then the best credit cards are out of reach now, and applying for a credit card is a waste of time.
So how can you come up with your credit card options? Here are some tips:
Find a credit card that suits consumers within your credit range. If you have average credit, check the average credit of the credit card. For bad credit, look at the bad credit of the credit card, and so on.
Check with your bank or credit union. If your credit card is a work in progress, it can be easier to get a credit card with your own bank. Since you have history there, it may be more willing to issue you a card.
See if you are eligible to apply for any card. Several credit card companies provide tools that you can use to check if you are eligible to apply for their credit card. Although prequalification does not guarantee approval, it does mean that you have a chance to get that card.
For those who have had trouble getting approval in the past, a secured credit card is usually the safest bet.
Step Three. repay loan
If you have debts, especially credit card debts, you should pay off as much debt as possible before applying for a credit card. This will reduce your credit utilization and debt-to-income (DTI) ratio, two factors that can have an impact on your application.
Credit utilization is the total amount of credit you use, and it is the second most important factor in determining your credit score. Also calculated on a monthly basis. This means that you can improve your credit score and pay your credit card balance in a fairly short period of time.
Reducing debt will also lower your DTI ratio, which is your monthly debt payment divided by your income. If it is too high, the credit card company may cautiously approve you to buy a new credit card.
Step Four. Wait at least three months between credit applications
Every time you apply for a credit card or loan, the lender will perform a hard credit check. There will be a hard credit check on your credit file.
Although a hard credit check only has a small effect on your credit score, it can affect future credit card applications. If you apply for multiple credit cards in a short period of time, you may be considered a high-risk applicant.
The waiting time between credit card applications is not regulated, but 3 to 6 months is a popular recommendation.
Step Five. Online application
Once you are ready to apply for a credit card, the easiest option is to apply online. You will see the "Apply Now" option on the credit card webpage. Click this button to start the application. Be prepared to provide the following information:
date of birth
Social insurance number
Mailing address (if you have lived at the current mailing address for less than two years, please fill in your previous address)
Step Six. Include all eligible income
Your income is especially important because the card issuing bank uses it to decide whether to approve your application and how much credit it will give you. A higher income will obviously help your case. You should not lie about your credit card application. If you do, there may be legal consequences. But you need to know what you can include so that you don't mistakenly underestimate your income.
In a credit card application, consumers 21 years of age or older can list any income they reasonably expect to receive. You can include some common types of income:
Your own income
Your partner/spouse's income
Money earned through business or sideline
Retirement account withdrawal
Step Seven, Submit application (follow up if necessary)
After submitting your credit card application, you will receive one of the following responses:
Approval: Your application was successful. You should receive your new credit card within seven to ten business days.
Under review: The credit card company needs more time to review your application. This usually takes several working days. If you wish, you can call to check the status of your application. You will receive a letter containing the card issuer's decision, and you may also receive an email containing this information.
Declined: This is a fearful response from consumers. However, don't give up for now, because rejection is not always the final answer to the issuer.
What many consumers don't know is that denial of credit card applications can be overturned. You just need to call the card issuing bank’s reconsideration hotline and ask if they can take another look at your application. It can also help you point out the reasons why you are a great cardholder, such as a strong payment history, your credit cards and loans. This is not the time to be humble.
If necessary, you can even make multiple reconsideration calls. Sometimes the first person cannot help you, but the second or third person will help you.
A better chance in the approved credit card application
If you are applying for your first credit card, or your recent application was rejected, this can make you particularly nervous.
Although you cannot guarantee success, you can make success more likely. This is your step by step guide on how to get an approved credit card.
Now that you know how to apply for a credit card, you can take some steps to increase your chances of success. If you choose a credit card that is within your credit score, pay off debts, and avoid applying for multiple cards in a short period of time, you have a great chance of being approved. If you do so but are refused, you can call the reconsideration hotline to resolve it.