Applying for a credit card can be a complex process and there are a number of factors that determine whether or not you are going to be approved for one. After you’ve submitted your application for a credit card, the supplier will review your expenditure, income, credit history, and any personal documents you’ve submitted in your application to decipher whether you’re a low-risk or high-risk applicant.
When a supplier reviews your credit history, they’re looking for evidence that you are able to pay back the money you borrow. While meeting the criteria for credit card approval is vital, there are a number of steps you can take to improve your chances of being approved for a credit card.
1. Limit the number of applications you submit
When applying for a new credit card, it is essential that you limit the number of applications you submit to different credit card companies. This is because every time you submit a credit card application, your credit score takes a hit and providers will be put off.
You want to look financially stable, not desperate, so it’s a good idea to do your research before applying for a credit card so that you are sure that you are choosing the right one for you. Make sure you’ve not got your fingers in too many pies and be sure to only submit your applications every six months.
2. Assess your requirements
There are a number of different credit cards available from a variety of providers that are designed to suit cardholders’ specific needs, so before you rush in and choose one of the first credit cards you find, take some time to carefully consider your own requirements.
If you’re a first-time credit card applicant, it’s a good idea to apply for a low-rate credit card to reduce your interest costs. If you’re a student, you can even apply for a student credit card or a low-income credit card; just make sure that you meet the eligibility criteria first.
3. Check your credit rating
One of the first things banks will review when assessing your eligibility for a credit card is your credit rating. Before you submit your application, make sure you request a free copy of your credit report so that you can see exactly what your provider is going to see.
Any errors on your credit report will be noticed which could affect your chances of being approved, so make sure you tie up any loose ends by reporting any mistakes to your credit reporting company.
4. Open an account with your future credit card provider
Opening a debit account or savings account with the bank that you’re applying for a credit card to is a great way of improving your chances for approval. Firstly, it will automatically speed up the application process because the bank in question will already have determined that you are legitimate as you are already one of their customers.
Secondly, if you are already depositing your monthly salary into a savings or current account with them, they will already have proof that you have a reliable source of income from a paying job. If you choose to submit your application online via digital banking, this will also speed up your application because your details will already be on your provider’s online banking system. You won’t have to worry about providing additional documentation if you already have an account with your provider, which gives you a head start on the application process.
5. Make sure your personal details are accurate
When you fill out a credit card application, your provider will request a great number of details, such as contact numbers, addresses, salary, employment details, monthly expenses and outstanding debts. Given the volume of information required, it’s easy to make a mistake, but errors on your application will slow down the process and reduce your likelihood of being approved.
Read over your personal details again before submitting and check that everything is accurate so that they have no reason to reject your application. If you provide incorrect information such as your outstanding balance, your bank may interpret this as you trying to conceal your debt from them, which will harm your chances of being approved.
6. Reduce your credit utilisation ratio
If you already have a credit card, it’s a good idea to pay off your current balance before you submit an application for a new card. This will reduce your credit utilisation ratio and will make you look more creditworthy to providers, increasing your chances of being approved for a new card. In order to determine your ratio, simply divide the sum of your current balances on your existing cards by the sum of their credit limits.
Applying for a credit card is a straightforward process that doesn’t take too much time, but you can speed it up and increase your chances of being approved by taking a few simple steps beforehand. If you meet the eligibility requirements and have gathered all the necessary documents, this should stand you in good stead for being approved.