How to improve your chances of qualifying for a credit card
What you need to know before starting that application
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Thinking of getting a credit card? Whether it’s your first one or a new addition to your wallet, you’ll have to get approved for it first. And, while that may seem like a given approval, there are some factors you should consider before getting started on that application. Here’s everything you should do to qualify for a credit card, according to an expert.
What you need to qualify for a card
To qualify for a credit card, you have to be a U.S. citizen or a permanent resident with a Social Security number (SSN). You also have to have an address that can be verified—and it has to be an actual residence, not a P.O. box (though you can use a P.O. box as your mailing address). When filling out the application, you will need to prove you have a source of income. This means including all sources of income—such as government benefits, investment income, and child or spousal support—and your employment history on the application. If you are married, you can also include your spouse’s financial information. “Non-working spouses are allowed to include the income of their working spouse, so long as they can access the funds to pay their credit card bills,” says credit card expert Jason Steele.
Anyone over the age of 18 can qualify for a credit card. But if you are under 21, you may have to answer some extra questions on the application to demonstrate an independent source of income and your ability to pay off a loan.
Finally, the most important thing, according to Steele, is to have an “excellent” credit score. (Though a “good” or “very good” score should be OK, too, particularly if you haven’t had much time to build credit.) But the best way to build your credit is a bit of a catch-22: Pay your credit card bills in full and on time each month. After some time doing so, “it’s virtually impossible not to have excellent credit,” Steele says. If you don’t have a card yet, you still have options. Beyond paying your credit card bills, you can also improve your credit score by paying off loans and paying your utility and cell phone bills on time.
Why your application could be rejected
If your credit card application is rejected, the most likely reason is that your credit score didn’t meet the card issuer’s standards. Your application will also be rejected if you have a pending bankruptcy or are delinquent or in default on any of your accounts. That said, your credit score and debts aren’t always the culprits. It’s also possible that your address couldn’t be verified, or you applied for a bunch of credit cards in quick succession.
“Other times, [rejected applicants] offer an address that isn't in their credit report, and the card issuer must verify it. If you don't reply to their inquiry and document your address, you could be denied no matter how high your income or your credit score is,” Steele says.
He also points out that some credit card issuers have policies that prevent applicants from being approved for multiple new credit cards. For example, Chase won't approve an applicant who has opened five or more accounts within the last 24 months (often referred to as the “5/24” rule).
What to do if your application is rejected
Not getting approved for a credit card isn’t the end of the world. “One of the biggest reasons for being declined is applying for a card that requires a higher credit score than you have,” Steele says. This doesn’t mean you won’t ever be able to get any kind of credit card, it just means you should apply for a different one.
If you have no credit score or a “bad” credit score—that is, anything below a 580—you may want to apply for a “secured” card. A secured card requires a deposit, and won’t have a large line of credit, but has “no effective minimum credit score,” according to Steele. This means you can work on building your credit in a relatively low-risk way. (The downside to this approach is that you will need to put down a fairly substantial cash deposit to open the card.) If your score is in the “fair” or “good” range, you’ll have more choices available to you. Some good options include cards that offer a percentage cash back on every purchase and have "flexible" credit score requirements. And, no matter what your current score is, if you use the card you end up with responsibly, your credit score will help open doors for more credit cards—if you want them—later on.