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Positive Payment History
A credit card company wants to see a positive payment history on your credit report before extending you an offer of credit. A positive payment history includes paying your bills on time every month, making more than just the minimum payment on existing credit card accounts and avoiding delinquencies and bad debts. This signals to a credit card company that you are responsible in your spending habits and are spending within your means. This makes you a good risk and more likely to receive an offer for a credit card.
Length of Open Accounts
The length of your credit history is also important to a credit card company when considering to extend you a credit card. The length of your credit history shows how long you have been able to sustain responsible spending habits and keep your finances in order. The longer you sustain these responsible financial practices, the more likely they are to continue. You may also be more likely to secure a lower interest rate or other special offer such as reward points for using the card, which can be used to purchase other goods and services.
Your debt-to-income ratio measures how much money you have coming in versus the amount of debt you are
obligated to repay. This includes your revolving monthly debts including credit card payments, student loans and car loan. Your mortgage or rental payment is not included in your debt-to-income ratio. According to In Charge's website, your total monthly debt should occupy no more than between 16 to 19 percent of your monthly income. This is considered a "comfortable" amount of debt, which is relatively easy to pay. Debt that exceeds 20 percent of your monthly income can cause financial stress or signal that a credit problem is on the horizon. A credit card company that sees a high debt-to-income ratio in your finances may be less likely to extend you a credit card.
Your Credit Score
Your credit score is the three-digit culmination of a variety of factors including your payment history, length of credit history and debt-to-income ratio. This score is the compiled average of credit scores reported from the three major credit reporting bureaus in the U.S. Experian, Equifax and Trans Union. A credit card company may have a required minimum score needed to extend you credit in the form of a credit card. Your credit score may also determine your credit limit and interest rate. The lower your credit score, the higher your interest rate since a credit card company may view you as a financial risk.