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Monday, November 5, 2018

Quick Tips to Get Approval on Credit Card

Companies don’t generally disclose the cause of rejecting a credit card application. However, some of the reasons why an application can be denied include:

  • Poor or lack of credit history.
  • Too many inquiries on the credit report.
  • Previous application rejections.
  • High credit utilization.
  • Too many credit cards.
  • Error in filing the application form.

Therefore, one must be careful while filling up the application form and provide genuine data. Following are the tips on how to get a credit card application through:

Have a Look at the Credit Report

The credit report will contain all the information related to an individual’s credit history. It can include the following:

  • The total number of credits availed.

  • The total amount of credits.

  • Timely payments of EMIs and debts, etc.

  • The number of inquiries by a lender.

After receiving the report, individuals need to examine it thoroughly and find any errors that can hamper their credit score. Then, they have to move to the next tip.

Improve the Credit Score

One of the ideal ways to have a credit card application approved is to improve one’s credit score. It can take months for one’s score to increase. Hence, it is recommended to keep a regular track of it.

Some of the ways how one can improve his/her CIBIL score includes:

Pay loan EMIs and Existing Card Bills in Time

Paying loan EMIs and existing credit card dues in time will have a direct impact on one’s credit score. It certifies that a borrower is trustworthy and handles all his/her credits responsibly.

Always pay the Entire Card Bill and not the Minimum due Amount  

Credit card’s bills come with a total due amount and a minimum due amount. The latter can be paid to avoid hefty interest and charges in the next bill when the borrower does not have adequate funds to repay the total due amount. This activity keeps a card from getting cancelled.

However, this will lower the credit score drastically. It displays that a cardholder is irresponsible and may even default in the future. Repaying the full amount due all the time will have a positive influence on one’s CIBIL score.

Keep the credit utilisation within 30% of the limit

Utilising more than 30% of the credit limit labels a cardholder to be credit hungry. Hence, it will cause his/her CIBIL score to drop. So, cardholders must always try to keep their utilisation below that mark to improve their score and apply for the foremost credit cards.

They can also ask their lending company for increasing the limit. However, it may again cause the credit score to lower a bit.

Refraining from making too Many Credit Applications

With every application, the lenders will inquire about the credit score of an applicant. Such inquiries will cause his/her CIBIL score to drop. Hence, individuals must refrain from making multiple credit card applications.

Use an online Financial Marketplace

As mentioned in the last point, applying through multiple lenders can reduce one’s credit score. However, many prefer to take this path. The ideal way to do so without lowering the CIBIL score is by using an online financial marketplace.

While financial institutions do a hard check, marketplaces do a soft check that will not hurt one’s score. One can use a marketplace to apply with various lenders. Furthermore, they can also help a customer to find a customised match.

Avail a Secured Card

Individuals can apply for a secured credit card in case they need one immediately. However, lenders provide these cards only against a fixed deposit.

By following these tips mentioned above, individuals can have their credit card application accepted in no time.

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