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It’s helpful to have a credit card. They’re safer to use than cash or debit cards and they make it easy to build credit. The best cards also come with rewards so you earn as you make everyday purchases.
But getting approved for a credit card – especially if you have less than stellar credit – can be difficult and frustrating. Where do you start when you’re constantly denied? That’s exactly what we’re here to answer.
Read on to learn more about how to increase your chances of approval when you apply for a credit card.
1. Check Your Credit Score
The first step in applying for a credit card is to know your credit score. Your credit score determines your creditworthiness or in other words how likely you are to pay back a loan. If your credit score is below the minimum required by your chosen credit card, delay applying until your credit improves. Or consider a card designed for people with bad credit. Find your credit score from any of the three major credit bureaus or from personal financial institutions like myFICO.
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2. Decide What Type of Card To Get
Do you want a card with cash back or travel rewards? Perhaps a credit-building credit card is more to your liking? Do you mind paying an annual fee and is it worth it? There are tons of different types of credit cards catering to specific needs and financial situations. Choose the type of card right for you.
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3. Prequalify Before You Apply
Check if you qualify for preapproval before you apply. It’s no guarantee but the soft credit inquiry won’t affect your credit score. Being preapproved or prequalified means you meet all the lender’s requirements thus far. You still have to apply and being fully approved will depend on other factors like your income.
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4. Apply Strategically
When applying for a credit card, especially if you have bad credit, it’s essential to be strategic. Only apply for cards within your credit score range, highlight any strengths on your application like your income, stable job, or housing situation, and consider a co-signer who has good to excellent credit. Another tip is to apply for a credit card from a financial institution where you have an account. Your established history there can help you get approved, especially if you don’t have any recent overdrafts.
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5. Don’t Give Up
Rejection can be discouraging, but it’s essential not to give up. If your application is denied, you can ask for a reconsideration. You also have the right to know why you were denied and what you should work on. Don’t rush to apply for another card right away. Wait at least 6 months between applications so as not to damage your credit score. Take the time to improve your credit score by paying bills on time, reducing outstanding debt, and addressing any errors on your credit report. The better your credit score, the higher the chances of approval next time round.
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The Bottom Line
Obtaining a credit card if you have bad credit or no credit history may be stressful and challenging, but it’s not impossible. You can alleviate some of the stress and increase your chances of approval simply by reviewing your credit score beforehand and knowing whether or not you meet the requirements.
If you meet your chosen card’s requirements, especially if you prequalify, there’s a good chance you’ll be approved. If not, look at other cards and apply for one that’s a better fit.
Remember, don’t give up. There are credit cards out there for everyone. Your financial situation can improve over time and with it, your access to credit.
