Getting a credit card is the best way to build a strong credit history. However, getting approved for a credit card may not always be easy. Here are some tips to get approved for a great credit card:
Make Timely Payments
Your payment history makes up a large part of your credit score—35%, to be precise. For this reason, paying all your bills on time is the best way to improve your credit score. Missing a payment or making a late payment can greatly damage your score, so avoid doing both these things as much as possible.
Find out Your Credit Score
Knowing your FICO score or getting an estimate of it can go a long way even before you apply for a credit card. A higher credit score improves your chances of getting a credit card. If you don’t have a credit card, you can use websites like CreditKarma to get an estimate of your score for free.
However, only finding out your score will not help—you also need to know what your score signifies and if it’s high enough to help you qualify for a credit card. Below is how credit score ranges are classified:
- excellent (760 or higher)
- good (701-759)
- fair (651-700)
- poor (under 650)
Though getting a credit card doesn’t just depend on your credit score, knowing your score helps you get an idea about your chances of getting approved. If your score is on the lower side, you can work on improving it by paying your bills on time and clearing debt.
Pay Down Debts
Your credit utilization is also a major constituent of your credit score. Credit utilization is the amount you owe in relation to your credit limits. Having large credit balances negatively impacts your credit score.
As per most experts, your credit utilization should be less than 30%. Anything above this makes you appear riskier to lenders and can damage your credit score. Your score surges right after you pay down your debts, and your credit utilization goes below 30%, which improves your chances of getting approved for a credit card.
Apart from these, don’t forget to look for the right credit card offer, review your credit report and get the errors (if any) corrected, use the credit you have wisely, and consider a secured credit card only as a last resort.