On the whole the approval rate of credit cards is less than 50%. Credit card approval depends on certain factors like your credit score which is the most Important factor, then your annual income and also the city in which you are living in.
As there are different type of credit card users, there are different types of credit cards as well in the market. There are travel cards, rewards cards, lifestyle cards and many more. Each card is curated as per different needs of the customers. Credit cards providers analyses credit history of the customer to determine the eligibility of a customer and the credit limit of the card. It is also used by other money lenders or utility companies to determine your financial capacity of paying bills or repayment of loans. Credit score or history also helps in determining the chances of the approval of your credit card.
Few tips to consider when applying for a credit card.
- Be Calm and do not make any decision in hurry
- Analyse your previous credits in your credit report
- Regulate and minimize your debt
- Fetch your credit score
- Declare all your income
- Finalize a right card as per your needs
Be Calm and do not make any decision in hurry
Buying a credit card is a process which needs a bit of research, you have to be calm and make sure that you don’t take any decision in hurry. First of all, analysing your needs is imperative, then choosing the right card is the second step.
Analyse your previous credits in your credit report
Before adding another credit source, it is important to analyse all your previously running credits such as credit card, any sort of loan etc. You can request a copy of your credit history from any of the credit reporting companies. Carefully analyse your credit history if you want to apply for a new credit card. Credit card companies, if you have other debt, will look at factors such as:
- Late payments
- Number of accounts you have
- Any derogatory marks
- The average age of your open accounts
- If any hard credit inquiries
- Previous Credit card utilization
Regulate and minimize your debt
Minimum debts increase the chances of approval of the credit card. It is always important to pay your debts before applying a credit card so that credit history looks good. You can also minimize the short-term debts paying it before its due date.
Fetch your credit score
Credit score is one of the most important factors in determining your eligibility for applying a credit card. Every credit card provider in Indian market expects a good credit score from its customer before lending them any loan or credit card. Credit score more than 700 is appropriate for applying a credit card. You can check your credit score through various online platforms.
Declare all your income
Like credit score, annual income is also one of the most important factor while determining your eligibility for a credit card. All credit card providers ask your annual income to determine your financial capacity of repaying the credits. You can declare your all sources of income provided you have necessary documentation to prove it.
Finalize a right card as per your needs
It is always necessary to analyse your needs and your purpose of buying a credit card. For example, if you are a frequent traveller, you should opt for a travel credit card. You should determine your purpose and then select an appropriate card. After selecting the next step is checking your eligibility before applying for credit card.
If a credit card provider declines your application for a credit card, you should determine the reason of disapproval and work around it.
