If you’re thinking about applying for a new credit card, you may be wondering how to improve your approval odds. When applying for any new line of credit, it’s important to consider the likelihood of getting approved – and it’s also a good idea to take a few quick actions that can help you improve your odds.
This guide will go over several actionable steps you can take to easily improve your odds of approval for that new credit card you’re after.
How to Improve Credit Card Approval Odds
There are many factors that go into a bank’s decision to approve a credit card or not. Not all factors are within your control, but there are definitely some steps you can take to increase your odds of being approved for credit. Check out our 6 actionable tips below!
1. Know Your Credit Score & Creditworthiness
First and foremost, you should absolutely be familiar with your estimated credit score and the credit factors that contribute to it. If your score is not quite where you want it to be, you can read about how to improve your credit score in our guide.
Knowing your score before applying helps you select the right type of credit card for you, which in turn improves your approval odds. For instance, if you have a FICO score in the low 600s, you should not be applying for any premium credit cards, as you are very unlikely to be approved. And since a credit inquiry can ding your score whether you are approved or not, you want to target cards that you are more likely to get approved for.
2. Apply for the Right Type of Credit Card
Once you know your score, you can better understand the types of cards you are likely to be approved for. And you’ll know which cards to avoid because approval odds are low. Choosing the right card is perhaps the biggest factor that can improve your approval odds when applying for credit.
3. Minimize Debt Before Applying
Whenever possible, it’s helpful to pay off as much debt as possible before applying for credit. This helps show banks that you are a reliable person to lend to. It also helps reduce your credit utilization, an important factor in the credit analysis banks perform when deciding whether or not to extend you credit.
For more information, check out this helpful guide on how to pay off debt.
4. Report Your Full Income
When you apply for a credit card, there are two main factors that the bank will look at: your credit, and your income. You will be asked to report your income on the credit card application.
To improve your odds of approval, make sure you state your full income, including income from all sources. Consider income from:
- Wages and salaries
- Contract work
- Investment income (dividends, etc.)
- Rental income
- Pension/social security income
- Child support/alimony
Basically, any money that you receive during the year that can be considered income can be used on your credit card application. By including all available income, you can help improve credit card approval odds, while also potentially getting a higher credit limit.
5. Report Household Income (if Applicable)
This point ties in with the previous strategy, but it’s worth talking about in greater detail. Credit card applications consider household income, not individual income. This means that if you are married or in a long-term committed relationship, you can report the combined income of both you and your spouse/partner.
It’s easy to see how this could potentially greatly impact your credit card approval odds. If you and your spouse each draw in a similar salary, reporting household income instead of individual means that your reported income essentially doubles.
This is 100% allowed by credit card companies. They ask you to report any income that can be used to repay debts associated with the credit card. So, if you and your partner split expenses, it’s completely reasonable to use combined income on your credit card application.
6. Take it Slow
To better your approval odds, do not apply for credit cards too rapidly. It can be tempting with all the credit card junk-mail we all receive, but applying too often can hurt your score and your odds of approval.
Similarly, if you apply for a card and are declined, it may be helpful to wait a few months before applying for a different card.
Hopefully these tips have been useful in helping you get approved for the card you want!
If you apply for a card and are declined, you can always call in to discuss the situation with a credit analyst. You may be able to provide more information and potentially even reverse the decision. And if not, you can at least get more information on why you were declined, which can help you prepare for future applications.