To get your credit card application approved, your credit score is one of the crucial factors a bank verifies. Other factors include income requirement, age criterion, credit report with credit information of the last two years and more. Remember that the more timely payments you make and the lower your debt is, the higher can be your credit score and the chances of getting your credit card approved faster.
Credit Score Categories And What They Mean
|Credit Score Category||Remark||Meaning|
|744-850||Excellent||Lenders think you are favourable|
|718-743||Very Good||You are a prime customer|
|697-717||Good||The score is above average and you are eligible for new credit|
|651-696||Fair||The score is below average and you’re eligibility for new credit is lower|
|529-650||Low||It is difficult to apply for a credit card|
|300-528||Poor||Your score affects your credit applications|
|No score||-||Insufficient information on your credits|
How Does Credit Score Help
- A good credit score increases the chances for you to get a good credit card.
- Your credit card approval time reduces drastically.
- Get room for better financial planning.
- With a good score, the credit limit applicable also increases.
- Knowing your credit score will help you monitor and improve it way before you approach a bank.
Make Use of Credit Score
There is no direct formula to know what credit score can get you which credit card. Obviously, all banks would want a trustable person who repays the debts on time and they prefer people with a good credit score. Therefore, when you know you have a lesser score, try not to apply for new sources of credit to avoid rejection.
According to the description of credit score categories, you must have a minimum of 695 to be eligible for a new credit without hassles. That means, when your score is between 695 and 720, you can get a credit card. If your score is above 720, you are considered a prime customer. Now, you can choose the credit card you want and the bank will be ready to issue you your desired card provided you meet all other eligibility requirements.
How to Improve Your Scores To Get a Credit Card
If your credit score is bad i.e., something between no score and 695, then you will have to strive hard to build up your credit score. Since the credit report takes into consideration your financial behaviour for the past 2 years, you have to manage your finances well for a long period of time to overcome any blotches on your records. This will help to see a rise in your score.
- Verify Personal Details: Get a copy of your credit report and verify if all the details mentioned in the report is concerned with you. This step is necessary because there may be some glitches while uploading documents or entering data. There are chances that some information is added to your name by mistake which drastically pulls your score down. Since a credit report can be acquired without any cost, it is always safe to verify things yourself.
- Reduce the Amount You Owe: If you have taken any loans from any bank in the past, make sure to repay the maximum amount possible. Make sure that the amount you owe to the bank is not a huge sum and reduce your overall debt.
- Have a Steady Income: One of the important factors that qualify you for a credit card is having a steady income. The bank needs to be assured that you have the capability to repay the credit card bills on a monthly basis. So, you need to provide the assurance by submitting documents that state your income. If you don’t have a steady income or don’t earn the required income, it will be tough for any financial institution to grant you a card.
- Be a Loyal Customer: Establish a good relationship with a bank. One way to build a healthy relationship with a bank is to open a savings/current account with a bank and make regular transactions with the account. Maintaining enough assets with a given bank can also improve your chances of credit applications being approved.
- Do Not Default: If you already have a credit card, there may be a reason for the bad credit score you have. Have you ever defaulted on your credit card payment? Even if you have missed the credit card payment just once in the past, it would be recorded on the credit report. This will affect the score. Ensure you keep up with the due date and try to make a t least your minimum monthly payments on or before the due date.
Improve Your Scores To Get The Credit Card You Want
If you are in a favorable zone in terms of credit score, you might want to experience the luxury of being a prime customer. This will not just fetch you a credit card, but you can afford to get the card you wish to have. However, you also must know that the other criteria such as annual income and age must also be satisfied in addition to having a great credit score.
- Irrespective of your current score, just practice a disciplined payment schedule.
- Build a loyal relationship with the bank.
- Do not make too many loan/credit card applications within a short duration of time.
- Do not over-utilise the credit limit on your existing credit card. Using up to 30% of your credit limit is the expected maximum. Going beyond this will hamper your score.
- Maintain some assets with your bank in the form of mutual funds, bonds, stocks and fixed deposit. Doing so will go a long way in improving your score.
The measures listed here to improve your credit score does not raise your score overnight. You need to incorporate these measures and manage your finances prudently on a consistent basis to increase your score. Keep a check on your credit report once in 6 months so that you keep track of your progress.