How do I get approved for a credit card?
In order to get approved for a credit card, you should make sure that your credit report is accurate and your credit rating is acceptable. You also need to have the discipline and the means to support a line of credit. Next, all you will need to do is select the right card and fill out an application. Getting a new credit card is a major financial decision that can impact your budget and your credit history but the approval process is much easier than you may think.
What do I need to do before I apply for a credit card?
The first thing you should do before you even consider applying for a credit card is to get a copy of your credit report, including your estimated FICO scores from all three credit bureaus. This will give you an estimation of your creditworthiness.
Your credit score is a detailed history of your financial health. It includes personal information, such as your address and employment history. It also lists your current credit accounts, including credit cards, mortgages, and loans. If you have had a bankruptcy or a judgment against you, this will also be listed on your credit report.
Your credit report is maintained by the three major consumer reporting bureaus- Equifax, TransUnion, and Experian. The bureaus use this information to estimate your creditworthiness, which is reflected in a 3-digit credit score between 300 and 850. The higher your credit score, the better chance you have of receiving the best interest rates and credit offers.
You can receive a copy of your credit report free once a year by going to Annualcreditreport.com. Once you have a copy of your credit report, you should review it carefully to ensure that all the information is accurate and up to date. If you see any inaccuracies, notify each credit bureau to have your report corrected.
Reviewing your report and scores should give you a good sense of how credit card companies will view your creditworthiness. If you have negative items or delinquencies on your credit report, or if your credit score is lower than average, you may want to take some time to build up your credit prior to applying for a credit card.
How do I choose the right card to apply for?
The number of different credit card options can be overwhelming. To determine the right card for you, consider your planned usage of the card:
Will you pay it off in full every month, or do you plan to carry a balance?
Will you be frequently using the card for travel or out
of the country?
What types of rewards are important to you?
Do you mind paying an annual fee?
The answers to these questions will help you determine the right card and card benefits for you. Once you’ve narrowed your choice down to a few potential options, don’t be afraid to call the credit card companies to speak to a representative and learn more about the features and the benefits of the cards. This is also a good time to try to negotiate a better deal, such as waiving the annual fee for the first year.
What kind of information do I need to provide in my credit card application?
Most credit card applications are straightforward. They usually require information such as name and address, social security number, income, and employment history.
The credit card company will use the information that you provide in your application to access your credit report and check your creditworthiness. When you fill out an application for a credit card, you must also indicate your consent for the company to view your credit report. The credit card company also has the right to validate the information you provide, such as calling your employer to verify length of employment.
What should I do if my application is denied?
If your application for a credit card is denied, you have the right to know why. Generally, a credit card company will notify you via mail within a few weeks as to why your application was denied. Often, credit is denied because the applicant is seen as too great of a risk due to outstanding debt or previous delinquency.
You have a few options if your credit application is denied. If you still feel like you need to get a credit card, you can look for cards that are specifically designed for building credit. These cards generally have more lenient requirements for approval. Just be sure to read the fine print. They also usually have lower credit limits and higher interest rates.
You may also want to consider asking a friend or family member with good credit, such as a parent or spouse, to cosign your application. If so, be sure that you can definitely commit to meeting the payment obligations. Not doing so could damage your relationships as well as your credit.
Another option is to take some time to work on your credit report and improve your credit score prior to reapplying for a credit card. By paying down existing debt and letting delinquencies on your report age, you may be able to make yourself a more attractive candidate for a new credit card.