How to Get Approved for a Credit Card
Many people get nervous when they apply for a new credit card, especially if it’s going to be the first credit card they’ve ever had. If this experience sounds familiar to you, you may not know what information is needed or how to improve your chances of approval. It helps to have an idea of what credit card providers are looking for before you fill out an application. While there’s no way to guarantee what will happen when you apply, here are the basics on how to get approved for a credit card.
What to Know Before You Apply
An application for a credit card asks for your name, address, phone number, and social security number along with information about your income and where you work. It may ask if you rent or own your home and whether you have additional income. The credit card issuer may contact your employer to verify that you’ve provided accurate information.
Before you decide to apply for a credit card, make sure you understand how much you’ll be charged for interest each month and whether there are any other fees that you’ll be expected to pay. It’s a good idea to make sure the information on your credit report is accurate before applying for any kind of financing. As many as two out of every three people find errors on their credit report. Inaccurate information on your credit report can affect your chance of being approved.
Your First Credit Card
If you’ve never had a credit card before, you may wonder how you can be approved for one when you don’t have credit history. One of the best ways to start building your credit history is by applying for a secured credit card. This means that your credit line is secured by money you deposit in a savings account. Since your credit card account is secured, there’s very little risk to the credit card provider.
Another alternative is a store card, the kind that retail stores frequently provide for shopping in their own outlets. The standards for being approved for these cards are usually more lenient than those for other types of cards but keep in mind that the interest rates being charged are likely to be high. Both a secured credit card and a retail store card provide an opportunity to build credit when you have little or no credit history.
Improving Your Chances
There are many things you can do to improve your chances of approval. Start by having a cosigner or by asking a loved one to allow you to be an authorized user on their account — as long as they make their payments on time. If you’re an authorized user, payments that are made on time should show up on your credit report, improving your credit profile.
Something else to keep in mind is that you shouldn’t apply for multiple cards at the same time. Every time you apply for new credit, the potential creditor pulls a copy of your credit report, and this activity shows on your report as a hard inquiry, which hurts your score.
Next, be sure to pay on time any credit card bills or loans that you have. One of the factors that can impact your credit score the most is your history of on-time payments. A single payment that goes more than 30 days past due damages your credit score and remains as a negative item on your credit report for seven years.
At the same time, avoid borrowing more than 30 percent of the available amount of credit cards or any other revolving accounts. This percentage is known as credit utilization. Keeping utilization low can help your credit score.
Lastly, review your credit reports before applying for new credit to make sure they’re accurate. Dovly is an AI credit engine that can help you dispute any errors you find on your credit report. Try it risk-free with our free membership tier. Get in touch with Dovly today.