Obtaining a credit card is equal to obtaining a loan from financial institutions. You have to be under certain criteria to be eligible to apply for this type of card. Nowadays, the online medium makes the application procedure easier to some extent. Yet there are many aspects you have to ponder upon before applying. Some pre-application steps are also involved in it.
One should follow a few tips to acquire a new credit card:
Alleviate the existing debt as much as possible
The existing credit card users have to clear all their debt as soon as possible to get a new card. Before applying for a new card, it is pertinent to know that the credit utilization ratio must be lower than 30%. This represents the ratio of the total balance in your existing card to that of the amount you have used.
So, if you find that there is a high ratio in your card, you have to clear it immediately before receiving a new card. There is another way to maintain the exact balance in your card. You can pay off the purchases with this card once every month. This will promptly lower the debts associated with the existing card and you can easily acquire the eligibility to attain a new one.
Reviewing the credit score
Issuing a credit card is as prominent as the approval of a loan. So, each and every financial institution, banks and other public money-lending organizations prioritize the credit score to accept the application. Credit scores above 720 are regarded as fantastic, scores at 630-719 are regarded as good and average. But the score below 630 is stamped as poor and the probability of the approval of the application falls down drastically. Thus, you have to maintain an average to excellent credit score. To avoid a bad credit score consider the following points:
- Avoid any new debt.
- Maintain a low balance on the existing cards.
- Make payments within the time.
VantageScore and FICO Score are the two leading models of credit score. The latter one is developed by the Fair Isaac Corporation and is widely accepted to a majority of financial institutions in the country.
Put all your income source in the form
It is the best method to increase the chances of approval of your application. While filling up the form online or offline, you must include every source of income (if any). It will raise your potentiality to pay the bill of the credit card.
Make sure you possess a low Debt-To-Income Ratio because it is the most appurtenant aspect. You must attach the germane documents of the mentioned information. Otherwise, it will be considered as fraudulent and as a result, your application may get rejected.
These are a few of the methods one can follow when applying for a credit card. In case of any fraudulent actions, you are supposed to pay a penalty charge of $1 million with imprisonment of 30 years if found guilty.