Nowadays, income and employment are not the only factors that are considered for credit card approval. Your credit score is one of the most important factors that are considered when approving your card application.
In here, we have discussed the easy yet effective ways to increase your chances of credit card approval:
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Do NOT apply for too many credit cards at once!
Applying for too many credit cards at once will have an adverse effect on your credit score, further reducing your chances of approval. This is because an inquiry is hit on your credit score for every card application. It is better to take your time and find the credit card that suits your needs.
Related: Check Your Credit Report Free.
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Know your financial standing
By financial standing, what we mean is to assess your creditworthiness. A credit report shows your credit score which is a numeric expression based on your credit activities. Every lender before approving any form of credit will pull your credit report. Therefore, you must have a good credit score to increase your chances of credit card approval. It is recommended to check your free credit report online at regular intervals.
If in a case where your credit score is low, it is advisable to first improve your score and then apply for a credit card.
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Apply for a card as per your profile
The chances of improving your credit card approval also depend on your profile. Always remember to apply for a card as per your profile. This is because it is important to keep your finances in mind while applying for any form of credit.
For example, a person with a good credit score and a good income is eligible to apply for an American Express credit card. Similarly, a person who does not have both, or only of them will have fewer chances of approval. However, this does not mean that the person is not eligible for cards as per his/her profile.
Moreover, the factor of annual fee on a credit card plays an important role in planning your budget. Therefore, wait and choose the right card rather than hurrying.
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Create a diverse range of credit
Also known as credit mix, a person should always try to create a diverse range of credit. This will give the lender an impression that the individual is responsible with all forms of credit. Having a mix of credit- say car loan, personal loan, and credit card will help your appeal as a reliable customer.
However, make sure that the credit mix does not affect your finances.
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Establish your credit history early
Building your credit in the early stages of life can help you maintain a strong credit history. This will increase your creditworthiness and give a good impression to any lender. Moreover, it is recommended to not close credit cards that are aged as they give a good standing.
Individuals with a longer credit history have a better chance of credit card approval.
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Keep in mind of your debt-to-income ratio
When applying for a credit card, always keep in mind of your debt-to-income ratio. By maintaining your debt-to-income ratio, you can increase your chances of credit card approval. Your debt should never exceed your income and should, in fact, be less than that.
Nobody wants to be rejected, especially by a potential lender. Following the above ways can definitely help you improve your chances of credit card approval. All this can be summed in this way. Your credit card approval depends on your 3C’s: Character (what are you like?), Capacity (what can you afford?) and Credit (How well do you pay back?)
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