How to be accepted for a credit card?
Transferring your debt balance or taking advantage of an attractive rewards package is often a big part of your financial re-think. However, if your application is rejected, this will leave a ‘footprint’ on your credit report, which can have a negative effect your ability to apply for future credit. This is called you personal credit score and is built up over time as you take on more financial responsibility with financial institutions.
In this article by Enjoy Compare we take a look at the steps you can take to improve your chances of acceptance.
Know your credit history
Lets start by getting a copy of your credit report and giving it the once-over should be the focal point of any financial re-think, as you need to be sure that the details the credit referencing agencies hold on you are all correct and up to date.
If possible you should get a copy of your credit report from each agency and check them against each other to make sure that there are no mistakes or discrepancies that could be bringing down your credit score.
This will give you a copy of your statutory report, which will show your personal details, your status on the electoral roll, any outstanding debt you have, missed payments or defaults, any financial links you may have to other people and any recent searches on your file, such as those by financial institutions.
You then need to thoroughly check your credit reports and make sure everything is correct. If there are any errors you need to write to the relevant agency and request it is changed.
Once you are satisfied that your credit file is in order and you know your credit score, you’ll have an idea of whether or not you are likely to be accepted for further credit.
Assess your financial position
In addition to your credit score, lenders will also want to know details of your annual income to help them assess whether or not they think you will be able to repay the debt.
So before applying you should take stock of your total monthly income and expenditure, work out whether you have any disposable income and gauge whether you will be able to afford to take on the responsibility of another credit card.
You should also take this opportunity to check how much you owe on any existing credit cards you hold as, if they are all close to their limits, lenders may be reluctant to give you access to any more credit.
If this is the case it may be worthwhile trying to pay down these debts before making any further applications.