How To Put Your Best Foot Forward When Applying For A Credit Card

February 7, 2018 at 3:41 PM Leave a comment

Applying for a credit card is a lot like interviewing for a job. It’s not just about how you look on paper, but also about the impression of reliability and professionalism you project. At the end of the day, the credit card company is looking for someone to establish a working relationship with. Thus, as with any relationship, all you need to do is show them that you can be trusted.

Putting your best foot forward can be hard, especially when your credentials don’t look too hot. How do you go about gaining the trust of someone who only knows you as numbers on a piece of paper? Well, the following guide endeavors to answer this question.

#1 – Know Your Credit

Information is power! Doing your research before applying for a credit card can give you an edge. If you understand, in detail, what credit card companies are going to see when they check your credit, then you can act accordingly.

Whether it’s trying to remove a quick debt, settling an inquiry, or resolving a past-due balance, understanding what’s keeping your credit from thriving can help you improve it. What’s more, different cards have different caveats and standards, so by knowing where your credit shines and where it dims, you can apply for the cards that will work best for you.

The bottom line is that if you don’t know what you’re working with, you’re not going to know how to help yourself. Get a grip on your credit and direct your efforts down the avenues where you have the best chance to succeed.

#2 – Include All Of Your Income On The Application

Whenever a credit card company runs a credit check, they’re getting very specific information. Sometimes this information can seem very comprehensive, but it can also exclude some very relevant information. For instance, when a credit card company checks your credit, they probably won’t see your total monthly income.

This incredibly significant information isn’t included in a credit check, perhaps to your advantage or your detriment. Credit card companies are interested in what is known as your “Debt To Income Ratio.” This tells creditors how much you make versus how much you owe, and gives them an impression of your ability to pay off the card.

Most of what keeps people’s credit scores down is their total debt. So if you’re able to show the credit card company you make more than enough to meet your debt and the card payments, then you’re in the clear.

#3 – Do The Math On Your Credit Utilization

This gets back to the point made at the top of the list: information is key. Your “Credit Utilization” is the dollar amount of credit the credit bureau believes you can be trusted to handle. Depending on your credit score, that dollar amount will ebb and flow accordingly. Understanding how much of this you’re already using and how much you have left to use will help you put your best foot forward when applying for a credit card.

So for example, if you’re applying for a card with a $1000 limit, then you need to have at least $1000 available in your credit utilization evaluation. What’s more, most credit card companies won’t accept you if you’re using more than 30% of your credit utilization. So truthfully, if you were applying for a card with a $1000 max, you’d need to have 70% of your utilization available regardless of the dollar amount.

What it comes down to is that credit card companies want to feel confident in your fiscal responsibility as well as your capacity to pay. It’s not just about having the money; it’s about having a proven track record of trustworthiness.

Conclusion

All in all, credit card companies are in the business of making money for themselves. As such, they’re only going to invest in people that they think can help them profit. Being able to prove yourself as reliable and capable can go a long way towards getting approval.

Keeping a finger on the pulse of your credit score will help you know what avenues to pursue. Listing your full income will demonstrate to creditors your capacity to pay. Ensuring that your credit utilization is under 30% will show the credit card companies that you have a lot of wiggle room to handle their payments. All of these tips will help you make an impact on creditors, and hopefully get you that piece of plastic we all crave.

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