Anyone can apply for a credit card as long as they have all the necessary documents. But not everyone—even those with complete requirements—can get approved for it. While knowing all the paperwork is the first step to applying for a credit card, it takes more than these documents to get it approved.
You cannot control whether banks will approve or disapprove your credit card application, but there are clever ways you can do to increase your approval odds. With the correct documents and under the right financial circumstances, you can gain an edge.
If you're eager to apply for a credit card but worried that your application might get rejected, you've come to the right place. Try one or more of these practical tips to finally receive that 'approved' stamp!
How to Get Approval for a Credit Card
Pay your bills on time
Besides proof of income, some credit card companies require applicants to submit a copy of bills for proof of address. Seeing that the applicant pays their monthly utilities and other bills allows them to gauge how financially responsible the applicant is and how they can manage an additional line of credit. Proof of billing or payment history also determines an applicant's credit score.
A good credit score is always a good sign for credit card companies. Making consistent payments on or before the due date can increase your credit rating and establish a positive payment history that can speed up your approval process.
Settle your debts
Credit card companies are wary of applicants with low credit scores and those who seem to struggle to repay debt. If you have existing debts, you might want to start paying them down to reduce the overall debt. Whether it's a mortgage, another credit card, or a personal loan, you should take the time and effort to repay the debt on time.
You can also try to request an increased line of credit from your existing accounts to shrink your debt-to-credit ratio significantly. Applicants who already have a high credit score and a good track record of timely repayments are most likely to get approved for this request.
Establish a good employment history or cash flow
Creditors will also base their approval on the applicant's overall capability to pay and manage their credit card use. One of the essential considerations is employment or a regular cash flow. They'll want to know your employment status to ensure that you can repay the charges to your account.
Maintain a good credit history and score
Credit history shows a record of your credit lines, total debt, and capacity to repay debt. Meanwhile, a credit score is a number used to measure a consumer's creditworthiness and evaluate their credit risk. The score ranges between 300 and 850—the higher your credit score, the better. Credit card issuers look at these records to decide whether or not the applicant can afford a new line of credit.
You can establish a good credit score by making on-time payments, catching up on your past-due accounts, keeping your balances low on your credit cards, and steering clear of new debt. If your score has taken a hit, you can always try to rebuild your credit. However, know that repairing bad credit takes more time than building a good one. Aim to always start in the right direction.
Apply only for a credit card you are qualified for
Just because there are attractive sign-up perks and rewards for credit card applicants doesn't mean you have to apply for the first offer you see. When applying for a credit card, you must research more about the offer and the options available from other creditors, as well as the application requirements and credit card details.
It's also wise to keep your credit score in mind and apply for cards that you qualify for. For example, perhaps it's too early or too far-fetched to apply for a premium rewards card if you don't have established credit yet or are still in the process of rebuilding your score.
Open a deposit account with a bank that issues the credit card
One surefire way to increase your odds of approval is by having other accounts with the credit card issuer, such as a deposit account. It's advantageous to have banking and investment accounts with them instead of just a credit card line. This existing and trusting relationship you have with the bank company earns you preferential treatment. It only shows that you're not a new applicant but a loyal customer.
Get Approved for a Credit Card Now
It's not unusual for credit card applications to get denied. That's why it's important that you get a better hold of your credit situation before you move onto your next application. Take note of these handy tips to help you increase your odds of online credit card application success.