Applying for a credit card these days is very easy. You can even apply for a credit card from the comfort of your own home. All you need is a device with an internet connection. All you have to do is enter some personal information on the bank credit card application form online and then click submit.
Before applying for a credit card, you need to do some planning. This planning will help ensure that your credit card application is accepted.
1 – Credit Score
The first thing all creditors look for on your application is your credit score. Each creditor has a different standard of what they deem as an acceptable credit score. The score rankings are usually standard across the board. Credit score companies have a point system for credit scores. Below is the typical score range for credit.
- Bad Credit: 300 – 629
- Average Credit: 630 – 689
- Good Credit: 690 – 719
- Excellent Credit: 720 and higher
Most credit card companies require applicants to have good or excellent credit for them to approve a line of credit. In order to know your credit score you need to access your FICO score. You can pay to get your credit score from MyFICO.com. You can also access your credit score for free from NerdWallet and VantageScore.
If after you receive your credit score, you notice that your credit is not in the excellent or good brackets then you have some work to do. You need to do the following to increase your credit score:
- Avoid new debt
- Keep your balances low on all other existing cards
- Make payments on all other credit cards on time
2 – Claim Your Entire Income On The Application
Credit card companies look at your credit score first; however, the score does not consider your income. Your income is important because it helps calculate your debt-to-income ratio. This helps banks understand your ability to make credit card payments. There are two ways to make this ratio go to your favor:
- Increase your income
- Decrease your debt
Make sure to claim all of your income, even if it is a side hustle you have.
3 – Don’t Accept The First Credit Offer You Receive
Having bad credit can make it hard to get approved for a credit card. That doesn’t mean that you should open a line of credit with any card company that approves you. You also shouldn’t apply to for a lot of credit cards in hopes that one will approve you. Submitting credit card applications can temporarily hurt your credit score.
Instead you can pre-qualify for a credit card using NerdWallet. This will not count against your credit score. Also, you can always reach out to the credit card company and ask about their card requirements.
Applying for a credit card should not be a stressful thing. You need to mainly understand what your credit score is before you start the process. After you learn your score, you can apply for cards that will accept your credit score or your can work towards a better score and then apply.