Whenever there’s a risk of rejection, taking the steps needed is never easy. It can feel about as scary as asking a girl out or giving a public speech. If this is your first time doing it, don’t sweat it! The process is rather simple and it can be neatly summarized in 6 easy steps:
1. Ask yourself where you rank in terms of your credit score
This is the first question you need to ask yourself before you proceed. With a low credit score, it’s easier to set your expectations straight, knowing the chances of getting approved don’t look too bright. As a matter of fact, certain providers make it publicly known that candidates with less-than-stellar credit scores will not be accepted. Whenever in doubt, you can also ask the provider to be more specific and give you some concrete numbers, so you’ll know what to expect. Alternatively, you can also ask around the social media or forums for users to share their experiences with a given provider.
2. Decide on the type of card you need
If you’ve never had a credit card before, finding one with low-interest rates should be your primary concern. Therefore, look for providers like First premier credit card that are known to keep them as low as possible. If the annual fees associated with it are low, that’s great, but if there aren’t any at all as is the case with plenty of providers, even better.
For those of you who are just starting out, don’t get greedy – applying for multiple credit cards is not worth it. That way, things will be easier to manage, and you’ll also be able to keep yourself under control and not go beyond your means when spending money.
Here’s a hint if you want to get approved for a credit card with a low credit score: go for the secured credit card. Oftentimes, a cash deposit is more than enough, and if you play your cards right in terms of being responsible with your finances, you’ll see your credit score go up in no time.
If you want to play it super safe and maximize your chances of getting approved, apply for a retail credit card. By doing so, you’ll find that getting approved is no problem at all – pretty much anyone who wants to can get in. Obviously, there are some drawbacks as a result; most notably, questionable customer services and high-interest rates, but that’s the gist of it.
3. Choose a provider
Do you already have a bank account? Ask the bank whether applying for a credit card is an option. Since they already have you on file as a client, it’s much more likely they’re going to approve you. The reason being is that they can have a look at your history at any time, so if you’ve been on point with paying everything on time and staying out of trouble, they’ll probably look upon you in a favorable fashion.
4. Know that certain providers have more transparent criteria than others
One of the most soul-draining aspects of applying for a credit card is never knowing where you stand and whether trying to get in touch with a certain provider is even worth your time. Some of them, however, are more transparent in regards to this than others and will let you know whether you’re pre-approved for it or not.
On the flipside, you’re going to have to deal with the hassle of having to submit some paperwork – you’re going to be asked to reveal some personal information (including your social security number). After that, the bank will head on over to do a soft inquiry on your credit score – the kind that won’t leave you with any negative consequences or lower it.
When they get back to you, they’ll let you know where you stand and either give you a green light to apply or tell you the reason why the application wouldn’t go through if you tried. So as long as you’re confident that your credit score is in order and that you have a regular monthly income, getting approved shouldn’t be one of your concerns.
5. Realize that a hard inquiry will temporarily lower your credit score
Financial experts will usually advise you that you shouldn’t apply on too many ends at once. As you’re probably familiar with this, a hard inquiry has a negative effect on your credit score, and trying your luck too many times in a short period of time is seen as a definite red flag.
If you’re unsure where you stand with your credit score, instead of applying directly, it’s much better to register with some credit monitoring services first. Some of these even have a database that tracks the approval success rates of their members, just to name one example. That way, you can scope the battlefield and decide whether you want to risk it with any given provider before taking the plunge.
Even if all else fails and a hard inquiry on your credit score cannot be avoided, the good news is that the negative effects only take 2 years to wear off. In other words, the score will take a hit, but it won’t be permanent.
6. Got approved? Congratulations!
If your efforts resulted in success, congratulations are in order. Still, resting on your laurels should probably be avoided; after all, you’re still going to need to stick to the best practices to keep your credit score in good order. So don’t max out your credit (keep it under 30%), pay your dues on time, don’t spend more than you earn, and just handle your finances responsibly.
Conclusion
Applying for a credit card may be a hassle, but once you’re familiar with what you need to do, it can hardly be considered as demanding. Your credit score is a huge part of the equation, so if yours is on the high end of the scale, there is little to worry about. And if it’s not looking too bright at the moment, there is always plenty you can do to raise it before applying. Good luck!
Just a girl trying to find a balance between being a Shopaholic and a Saver.
I cleared $60,000 in 18 months earning $65,000 gross/year.
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