Though applying for a credit card is hassle-free and is generally a quick process, there are a few other factors that have to be taken care of before you hit the Submit button of your online application form.
Irrespective of online or offline applications, the approval of your application will be successful when there are no discrepancies in the form and when you meet the required eligibility criteria for the particular card you’re applying for. Here are a few common mistakes you must avoid while putting in your application.
What you shouldn’t be doing:
Ignore Your Credit Score
Your credit score plays a major role in deciding if you would be given a credit card or not. A credit score ranges from 300 to 850. Though each bank has their own standards set to mark a good score, CTOS says that a score of 697 and above is good enough to get a new credit. Poor management of your finances and payments will reduce your credit score. One of the reasons for getting a dip in your credit score can be not managing your existing credit card well. Having a credit card and not making the payments on time will affect your next credit card application.
When you have a good credit score, banks are happy to strike a deal with you. If you have a bad score, it may be difficult to get your application approved.
Miss Checking Your Credit Report
Before you apply for a credit card with any bank, it is recommended to get a copy of your credit report and check it for any inconsistencies. You can either visit one of the BNM offices or apply for your credit report online via eCCRIS site. And, you need to know that getting a copy of your credit report, in no way, affects your credit score.
Once you get the report, read through it and confirm that the details provided in the report are all valid. Sometimes, there may be incorrect information or inconsistencies in the report. If you find such errors, you have to immediately inform the authorities and get it corrected.
Hurry While Choosing A Credit Card
When choosing a credit card ensure you carry out thorough research and pick a card that matches your preferences and lifestyle. Do not take a card only because your friend has it. If you regularly spend on groceries, then an entertainment card does not fit your requirement. You must choose a card that gives you maximum rewards on grocery shopping.
Pick A Card Just For Sign-Up Benefits
Don’t get excited about sign-up benefits offered by a card and go ahead with it. You have to look into the finer details such as annual fees, finance charges, the rewards offered by the card and others. Sign-up bonuses can definitely be helpful but make sure you go through the terms and conditions attached to the offer.
Moreover, a card should be chosen for the utility it will provide and not just a one-time bonus offer. The perks offered by a card should be in line with your spending habits.
Apply For Multiple Credit Cards
Applying for a credit card across multiple banks at the same time hoping one application would be approved if any one bank rejects your application is a costly mistake. The numerous applications made would only signify to banks that you are credit-hungry and as such, the chances of your application being approved are lower.
When a bank rejects your application, take time and figure out why your application was rejected. Try to correct the mistakes you have done when you find out the root cause for rejection instead of hurrying up and applying for a card through another bank.
Fabricate Your Income
Don’t lie about your income on the credit card application form. Banks ask you to state your annual income in order to gauge your ability to repay the credit card bills. Your credit card application will be processed only if your income level meets the required criteria and s corroborated by the bank.
Being a Guarantor
If you had ever become a guarantor for a family member or friend previously and if the person hasn’t paid back the loan on time, you will be held liable for the default loan amount. Such a scenario would reflect on your credit report and affect your score. This, in turn, will affect your credit card application approval.
Have Too Many Loans
There are chances that the bank rejects your credit card application if you already have a number of loans. The bank analyses the possibility of you repaying the loans including your credit card bills with the available income. Based on the debt-service ratio, you may be granted the card only if the bank is convinced that you can manage all your financial liabilities with the income you earn. However, having numerous loans will affect your application.
No matter if this is your first credit card or not, you must consider the factors mentioned above to ensure your application is approved.