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6 Ways In Which You Can Increase Your Chances of a Credit Card ApprovalSeptember 18, 2019
Applying for a credit card is a simple process these days. More often than not you just have to fill out information on an online form and hit submit. However, getting approved for the card can be a lot harder, as the process involves an evaluation of the applicant’s income, credit score, and debt.
Here are several steps you can follow to improve your chances of getting approved.
- Check your credit report and score: Credit card approval mainly depends on your credit score. Usually, a score of 300 – 629 is considered bad, 630 – 689 is considered average, 690 – 719 is considered good, and anything above that is excellent. Naturally, applicants with a good or excellent score are most likely to be approved for the card that they apply for. So, if your score is not good enough to win you an approval, its best to first try to boost it by paying your bills on time, keeping balances low on existing credit cards, and avoiding new debt. Also, make sure you get a copy of your credit report from annualcreditreport.com, and scan it for mistakes, as well as areas where you can make improvements. All three credit bureaus – Experian, TransUnion, and Equifax are required to provide you a free credit report once a year. So if you space it out evenly, you can obtain your report for free once every four months from annualcreditreport.com.
- Reduce your outstanding debt: One of the determinants of your credit score is the credit utilization ratio - your total outstanding balance divided by your credit limit. This ratio should ideally be below 30% at all times, so pay down your existing balances as quickly as possible. Also try to pay off credit card purchases more than once a month. This will ensure that a lower balance is reported by your issuer to the credit bureaus, which in turn will lead to a lower credit utilization ratio.
- Only apply for offers that fit your credit profile: As mentioned previously, most credit cards are meant for people with good or excellent credit, so before you apply for a card, make sure it is meant for someone with your credit profile. You can visit this site to find out which cards are likely to qualify for. Remember that each and every card application ends up on your credit report as a hard inquiry, so if you are still unsure about the card qualification terms, call up the issuer to get all details before you apply.
- List all your income sources on the card application form: Your credit score doesn’t include your income; however, this detail is extremely important to help issuers calculate your debt-to-income ratio - which in turn determines how likely you are to repay any loans that you may have taken. The higher your income, the lower this ratio will be. So, if you have any sources of income apart from your full-time job (say alimony, child support, investment income, etc.), make sure you list these on your application. Avoid making any overstatements, as providing false information on credit card applications amounts to fraud and is punishable by $1 million in fines, and/or 30 years of imprisonment.
- Understand the restrictions of the card issuer: Certain card issuers limit the maximum number of accounts where an individual can act as the primary cardholder (for example, American Express has a limit of four accounts per person), while others limit the number of applications you can make within a given time period. Keep all these restrictions in mind when applying for a card to avoid being rejected.
- Call the issuer for reconsideration: Even if your application is rejected, you can still call the issuer to plead your case. Before making the call, formulate a convincing argument to prove that you are a financially responsible person and deserve to have the card. Remember to always be polite, as customer service agents are more likely to respond positively to individuals with a pleasing demeanor.
In cases where you already have an account with that card issuer, you may suggest reallocating a part of your existing line of credit with that bank. A bank’s first priority is to limit its exposure in case you can’t pay back your loan, so by volunteering to shift your line of credit, you can make it possible for an issuer to offer you a new account without increasing its risk. Finally, you can also suggest closing an unused existing account if it results in approval for the new account.
But what if you are someone with good credit but still can't get the funds you need? Well, in that case, you can approach our team at Fund&Grow. We help individuals get $50,000 - $250,000 of unsecured credit at little or no interest for a period of 6, 12, or 18 months. What’s more, this amount can be used for anything, no questions asked. So if you know someone who needs this kind of financing, call us at (800) 996-0270, and we will take care of the rest.