The average credit score is up, and more people are opening new credit cards and loans, according to a recent VantageScore analysis. But that doesn’t necessarily mean you’ll get approved for the new credit card you’ve been eyeing.
As a credit card expert who helps people plan out credit card rewards strategies, I always say the first step is making sure you’re likely to be approved for a new card. So, before you hit submit on your application, follow these six tips to improve your chances of getting approved.
1. Review your credit report
Your credit score is the primary factor the card issuer will weigh when reviewing your credit card application.
Before applying for a card, you should know what’s in your credit history and what your credit score is. You can receive free copies of your credit reports each week from the three major consumer credit bureaus by making a request through AnnualCreditReport.com. This is the only website that’s authorized by Federal Law to provide the free credit reports that you’re entitled to.
When you get the reports, look for any mistakes, such as unauthorized accounts or even accounts for other people.
If you find an error, you can dispute it with the credit bureaus. They’ll investigate and if they find it is a mistake, it will be removed from your report, and you may see your score jump up. You can also pull your credit score from the credit bureaus directly. Many credit card issuers now also let you check your credit score for free.
Expert Tip
If you’re facing financial difficulties, you can apply for credit card forbearance. To request forbearance, contact your card issuer.
2. Pay down your existing debt
The amount you owe on your credit cards and loans is the second factor that makes up your credit score. Even if you can’t afford to wipe out your debt, paying down as much as possible can help improve your credit.
Your credit utilization is the amount of debt you carry compared to your available credit. Aim to keep your credit utilization under 30%, and work towards 10% for an even higher credit score.
Once you’ve paid down as much debt as you can, wait for the payments to show up on your credit report before applying for a new credit card.
Expert Tip: When applying for a new credit card, pay special attention to any balances you have on other cards from the same issuer. A bank will be hesitant to grant a new line of credit to those who already have very high utilization of their existing lines of credit.
3. Shop around for the ‘right’ credit card
There are hundreds of credit cards out there, each with its own perks, fees and credit requirements.
For example, there are credit cards for those with bad credit, credit cards for college students and other cards that make the most sense for your first credit card. And if you’ve had issues with credit, a secured credit card is often the best choice.
So, it wouldn’t make sense to apply for a premium travel rewards card if your credit score is fair or average. Premium travel credit cards typically come with better and more desirable features, but they generally require good to excellent credit to be approved. If your score is fair or average, you’ll want to take time to improve your scores before applying for an advanced card.
Research which types of credit cards are best for your credit profile, then narrow in on the ones that best fit your needs -- paying off debt, earning rewards or building credit. You can check out CNET’s credit card best lists and reviews for a better breakdown on the credit score ranges required for approval.
4. Take advantage of preapproval offers
Another easy way to make sure that you’re qualified for a particular card is to look at offers that you’re preapproved for.
Preapproval means that the card issuer has selected you for an offer based on your credit score. And while approval isn’t guaranteed, just the fact that you received this offer means that your credit profile is consistent with applicants who are being approved.
Most issuers have their own preapproval, prequalification or preselection process to match you with one of their credit cards:
- Wells Fargo
- Chase
- American Express
- Citi
5. Avoid common credit card application mistakes
When you fill out your credit card application, simple mistakes can cause it to be rejected. For example, you should be very careful to avoid typos and misspellings, especially with your Social Security Number. And make sure to use the mailing address that’s on your credit report or one known to the card issuer. It will be easier to be approved by using your existing permanent address than a new, temporary address.
And when the application asks for your income, remember that you can include child support, alimony, investments and government income. You can also include the income from your spouse or domestic partner, so long as you have a reasonable expectation of access to it for the purpose of repaying a loan.
6. If you’re denied, call the reconsideration line
If your application isn’t initially approved, don’t give up. Most credit card issuers have a reconsideration process that allows you to have a second chance at approval.
When you call this line, you can ask why your application wasn’t approved, and if there’s anything that you can do to change their decision.
Options can include updating your application’s personal or financial information, moving part of your credit limit from an existing account or closing an existing account. If the decision was close, you’d be surprised how often a reconsideration call results in an approval.
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