Getting a credit card approval is entirely different thingthan apply for a card. In these days applying for a credit card is as easy asjust providing your information to Gmail for account opening and clicking“submit.” However, getting a credit card approval requires someproactive planning. Here we will discuss some basic working which you must startbefore you apply for a card.Work on your Credit Score1. Work on your Credit Score
1. Work on your Credit Score
Your credit score is one of the main factors in the decisionof a credit card issuer to approve your request. Although some variations docome depending on the bank with which you are dealing. However, the results aretypically lenders classified credit score as follows;
| Bad credit | 300 – 629 | ||
| Average credit | 630 – 689 | ||
| Good credit | 690 – 719 | ||
| Excellent credit | 720 and up |
Most credit cards require excellent or good creditspecifically rewards cards. Therefore, if you have struggled to keep a goodcredit history, it may be worth postponing your application until you are ableto get your finances in top order. To do that you can follow;
- Submitting payments on time
- Manage your credit card balances as low aspossible
- avoid new debt
Alternatively, you may consider some Secured credit cardsespecially for people with bad credit. This can help you out to improve creditand making you closer to qualifying for a reward credit card. But be sure thatyou use secured card responsibly for rebuilding your credit.
Remember that multiple credit scoring models are availablein the market. However, the two most famous are the FICO and VantageScore. FICOscores are widely used by lenders and it is developed by Fair Isaac Corp. Whileon the other side VantageScore model has been developed to compete with FICO bythe three major credit bureaus.
2. Reduce your debt
A total of 30% of your credit score depends on how much youowe. In particular, high credit card balances can be damaging. Your creditutilization ratio — must be less than 30% on each credit card.
Let’s suppose, if your credit card have $1,000 credit limit,then you must not maintain balance more than $300 at any time.
You can reduce your credit utilization by setting up anexisting balance payment plan as soon as possible. In addition, one can alsopay off purchases more than once in one month to reduce your balance.
3. Never apply for the first offer you see
If your credit score is not good, it can be difficult toobtain approval for a card with a large registration bonus and a lucrativereward structure. Each credit card application approval or rejection is basedon your credit report. So, it is important to do proper research and considerall requirements before you apply for a card. If still unsure after doing a lotof reasearch, make call to the issuer and ask about the requirements of aspecific card.
4. Don’t hide your income in application
Keep in mind that credit score is an indicator ofcreditworthiness. But specifically it dont tell about your income to lenders.In order to calculate your debt-to-income ratio, credit card issuers need yourincome level to find out your ability to make payments. There are two ways toreduce this ratio: revenue growth or debt reduction.
Disclose your full income, even if you are earning beyondyour full-time job. Declare that income in your application in order to reflecta precise debt-to-income ratio. However, don’t try to overstate your income toinflate your scoring. You must know that if an issuer has provided falseinformation on your application, you may be penalized for up to $1 millionand/or up to 30 years of jail with a charge of credit card fraud.
5. Try again & again
If you think you did all right and your application is stillrejected, don’t just move on. Credit card issuers have lines of reconsiderationto make an appeal for your case.
Before you submit an appeal, have a plan. You are entitledto ask the issuer why you were denied. Moreover, you can also check your creditreport for FREE at AnnualCreditReport to find any defects.
Devise a winning argument on few simple questions like; whyyou want the card? And why you are responsible for fiscal matters? Be polite inyour discussions and try to give a valid reason for each question.
Wrapping up
It hurts both psychologically and with regard to the impacton your credit score when you are rejected for a card.
Therefore, it is important to observe your credit score andcredit history carefully before applying for next card. Also ensure that youprovide accurate information during the application process and that you arewell-prepared to make a case for yourself in case you don’t get an approval.