How do I ensure my credit card application will be approved?« Back to Questions List

I want to apply for a new credit card, but I’m afraid that I might get declined. What can I do to improve the odds that they’ll approve my application?
Posted by jwrighte
Asked on November 8, 2016 3:42 pm

When applying for a credit card, remember that the process involves much more than simply answering all the questions on a form. There are actually several things you’ll need to do—most of which will need to be accomplished long before you even consider submitting your application.

1. Learn Your Credit Score
Your credit score is one of the primary determining factors when a bank decides whether to accept your application. This score is essentially a rating of your creditworthiness, as determined by the three credit reporting bureaus—Equifax, Experian and TransUnion.

What is considered a “good” or “bad” score is ultimately left to the bank’s discretion, but credit scores generally break down into one of three ranges:
• Below 629: Bad
• 630-689: Average
• 690-719: Good
• Above 720: Excellent

If your credit is less than “good,” your options for credit cards will be limited, and you may only be eligible for cards with higher interest rates, lower maximums, and more fees.

2. Don’t Apply for the First Card Your Find
Each time you apply for a credit card, a notation will be made on your credit report. If you apply for several different cards—and are subsequently declined—this will further damage your credit reputation.

It’s recommended that you take the time to research the different cards available to you, then choose the card which best fits your needs and your situation. Not only will this improve your odds of acceptance, it can ultimately help you manage your credit more effectively.

3. Manage Your Debt
How much you currently owe as compared to the amount of credit presently available to you—referred to as a credit utilization ratio—is another major factor in determining your credit worthiness. Therefore, it is advantageous to pay down your present debt before applying for a new card.

4. Don’t Underestimate Your Income
Your debt-to-income ratio is an important indicator of whether lenders can trust your ability to repay what you borrow. The more money you make, the less likely they are to hesitate.

If you have multiple streams of income, report all of them. This will improve your odds of being approved. But remember, be truthful, and don’t overstate your income. Lying on a credit application can carry serious consequences, including fines and jailtime.

5. Follow-Up
If you’re declined, that doesn’t necessarily mean it’s the end of the road. Most credit issuers have reconsideration lines which you can call to appeal the bank’s decision or to find out exactly why you were denied.

Check your report for accuracy before calling, then remember to argue your case convincingly, but calmly and politely.

Posted by jwrighte
Answered On November 8, 2016 3:45 pm