Finding a credit card that's a good fit for your lifestyle is hard enough, but getting approval can seem like an impossible challenge. Rejection is never fun, and it's particularly painful to be rejected because of something as personal as your financial history.
Applying for credit cards is a lot like dating. If you go into the situation armed with knowledge and an open mind, you could end up with a partner for life. Conversely, a mismatch of expectations on either side can doom a relationship long before it begins.
Before you fill out any paperwork for a new card, here are a few things to keep in mind to ensure you’re approved quickly and painlessly:
1. Know Your Credit Score
Applying for a credit card without knowing your credit score is akin to a blind date: Things can work out in your favor, but going into the situation without any knowledge represents a tremendous gamble.
Different credit cards have different guidelines as to what they'll accept from applicants. Most rewards cards require a good credit score — generally between 660 and 719 — and the ones with the best perks often only approve people who have excellent scores of at least 720.
The higher your score, the better odds you have of landing the card of your dreams. A survey by the Consumer Financial Protection Bureau reported that consumers with scores between 660 and 719 have an approval rate of 58.7 percent as it relates to general purpose credit cards; people with scores higher than 720 stand an 85.5 percent chance of being approved for the same cards.
If your score isn't as high as you might like, it's probably best to avoid applying for cards that have incredibly strict approval guidelines.
2. Take Your Time
You can’t make someone love you, and you can’t force a lender to approve you for a card. It’s important to wait until you find the “right” card instead of applying for the first offer to come along.
It might be tempting to sign up for a credit card with a lucrative rewards program and perks galore, but you’re setting yourself up for rejection if you’re unqualified. A haphazard approach to credit applications can also sabotage your future relationships. Every credit card application you complete ends up on your credit report, and your score can suffer if your report contains several rejected applications.
Before you apply for any card, use our free customized service to match yourself with offers that fit your needs, lifestyle, and credit score. You’ll have a much better chance of being approved once you’ve found the right fit.
3. Manage Your Debt
Banks and credit card companies appreciate applicants who have their debt under control, and they’re highly unlikely to approve applicants who have more debt than they can manage.
Credit utilization — your debt divided by your credit limit — accounts for about 20 percent of your credit score. A low score caused by too much debt can lead to rejected credit card applications, which can end up further damaging your score. Stubbornly applying for credit cards that are out of your reach can quickly become a downward spiral into bad credit.
Before you apply for any cards, try to pay down as much of your debt as possible. You don't have to completely pay off everything — some debt can boost your score by proving you’re a responsible borrower — but try to limit your credit utilization to less than 30 percent for every card you have. For example, you should only carry a balance of $1,500 on a card with a credit limit of $5,000.
4. Include All Your Income
Your credit score tells credit card companies a lot about your finances, but it’s not the whole story. They also scrutinize your debt-to-income ratio, with a lower ratio meaning good news for applicants.
Lowering your ratio is a fairly straightforward process — you either reduce your debt or increase your income. Before you rush to your boss and demand a raise, carefully consider whether you've included all sources of income on your application.
Maybe you have a side job that earns you a few hundred dollars a month, for example, but you didn't include it in your income computations. Remember that even seemingly insignificant amounts of money can help improve your ratio. That said, don’t lie about your income. Even a slight exaggeration is considered credit card fraud, which can lead to much bigger problems than a rejected application.
5. Plead Your Case
If you feel like your application was solid but still rejected, you can always call the credit card company and plead your case. Start by asking why you were denied, but be ready to provide a convincing argument and evidence as to why you're a responsible borrower. Customer service representatives are humans, too, and you might be able to win them over with a polite, logical case.
Banks and credit card companies are required by law to offer a reason for rejecting a credit card application. This often boils down to a rejection letter with justification, but you’re able to request a free copy of your credit report whenever an application has been turned down. Take a close look at the reason you were rejected and plan out steps to fix any problems.
In the dating world, you might spend years looking for the right partner before pouring your heart and soul into convincing him or her that you’re perfect for each other. Credit cards are similar, though it ideally shouldn’t take you quite as long to find a match. While rejection is always a risk, approaching a new credit relationship with the right attitude can make all the difference.
Do you have a solid credit score but are not sure which card you'd like to add to your wallet? Check out our latest look at some of the best credit cards available for a few suggestions.
Editorial Disclaimer: Information in these articles is brought to you by CreditSoup. Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles. The information is accurate to the best of our knowledge when posted; however, all credit card information is presented without warranty. Please check the issuer’s website for the most current information.