Today almost everyone is applying for a credit card because of tremendous ease with which one can carry on their financial transactions. One can easily apply for a credit card online which has a number of benefits as well. However, while anyone can apply for a credit card, there are also a few things one can do to ensure that the application is also approved. That is because only the income and the employment are not the only parameters based on which a card is approved. Here are some other points to consider.
- Try not to apply for credit cards from too many banks all at once. Too many cards could have adverse effect on your credit score if you keep missing payments and so many rejections would again affect your credit report in a most disruptive manner. It is easy to apply for credit cards because there are a number of pre- approved offers on the cards as well as on personal, home and business loans that makes getting financing very easy. All you have to do is share a few basic details and check out your pre-approved offer.
- It is also important to know one’s financial standing before applying for a credit card. Know your own credit worthiness as it is one of the determining factors for credit card eligibility. Every lender will check your credit report and the score before approving the card and try to ensure that you have a score around 700 so that your card gets approved. If it is low, then wait for the score to improve and then apply again.
- The chances of getting a credit card approval also depend on one’s profile. Keep your finances in mind while applying for a card with a particular limit. In case one does not meet the profile requirements of the lender, it still does not mean that the application would be rejected altogether. It just means that he or she might have to settle for a card with a lower limit. There are also annual fees and other charges to consider so wait till you get the best offer.
- By creating a diverse range of credit, what is known as credit mix- a person could give the impression to the lender that he or she is comfortable with managing all kinds of credit. It could be a mix of car loan, personal loan and credit card loan but it is important to check that it does not interfere with the finances.
- The sooner you establish the credit history the better. Building a credit history earlier in life- especially if one already has plans to opt for loan or apply for a credit card in future- is one of the best financial decisions that one could take. The longer credit history one has, the greater at the chances of approval.
- Last but not the least, it is a good idea to keep in mind the debt to income ration while applying for a card. By maintaining this ratio, one can increase the chances of credit card approval and the debt should never exceed the income.
It can be said that no one wants their application rejected, and so it is a good idea to go through all the criteria and conduct a thorough research before making an application. Once there, using a credit card wisely will help you manage your finances in unprecedented ways and pave the way for a secure financial future.
Gaurav khanna is an entrepreneur, digital marketer & writer. You can find Gaurav on Linkedin