Credit Card Application: Getting Your First Credit Card
Credit cards are one of the most convenient tools that you can ever use today. Besides, you would really need this tool if you want to purchase something but you don’t have the cash for it. With a credit card, you can virtually purchase the products or services you need even without carrying cash.
Credit cards are a very useful tool to manage your expenses.
However, before you apply for a credit card, you should first consider a few things in order for your first credit card application to be approved.
The first thing you should consider before applying for a credit card is your credit history. This is the most essential thing that a credit card company will look at when deciding if they should issue you a credit card or not.
If you have a bad credit history, it will be hard for you to apply for a credit card and vice versa. So, before you apply for a credit card, you should make sure that you have a good credit history in order for you to get approved for one easily.
However, if you don’t have a credit history, then you need to make a one. You can do this by taking out a small loan or through a hire-purchase agreement. After you make payments, you are now making your first credit history. Make sure you pay it off on time in order to get a good credit history and get approved for your first credit card.
If you don’t know whether you have a credit history or not, you can always apply for a copy of your credit history, by doing this, you can know if you have a good credit history or a bad credit history or if you have any credit history at all. You can apply from a credit reference agency in your area for this document.
After discovering that you have a good credit history, the next step would be deciding how much your credit card limit should be. This is usually determined by your income. And, usually your savings is also important.
Depending on your savings and your income, you can then apply for a regular credit card, a gold credit card or a platinum credit card. These types of cards vary in credit limit and also have different benefits that you can have.
Usually the higher the credit limit the higher the fees will be. However, the benefits you can get with a higher credit limit are better than regular credit cards. Two examples would be frequent credit card user money back, and discounts on purchases with credit cards.
The next step in credit card application is submitting your application form. The credit card company you chose will then review the application form, check your financial background and will also check your credit rating. They will also ask you to comply with certain conditions in order for your credit card application be approved; such as asking you to have some money on a deposit account with the company.
Sometimes, your credit card application may be rejected. You have to ask the company why your application was denied. There are usually two reasons why the company rejects an application. The first is that you failed the credit rating test and the second is that you probably filled the credit card application form all wrong.
If you failed the credit rating test, you will need to apply in another credit card company. However, if you just filled the credit card application wrong, you can still reapply with the same company. And, this time, fill up the application form correctly to avoid getting rejected again.
These are the things you should first consider when applying for a credit card. Meeting all the requirements and conditions of the credit card company will ensure you of getting your credit card application approved.
Does getting rejected on a credit card application affect your credit?
Getting rejected – No.
Having them run a credit check on you – Yes. Every time someone inquires about your credit, there is a small ding to your score. They disappear after a while, but it is assumed you are shopping around for more credit, and that is a bit of a risk.
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Diane has a good answer, but I'd like to add more to it.
Anytime that you formally apply for credit, it creates a "hard inquiry", which can lower your score 3-10 points. This is different from a "soft inquiry" that may come from pulling reports yourself and preapproved offers that companies might send you. However with the new scoring system, that all might change…
It's been rumored that the new scoring system, FICO '08 may not penalize as much for applying for a lot of credit as it used to in the past, but that doesn't mean that you should apply for credit that you're not going to need or even more so use properly. Keep in mind that you should only use what you can afford to pay off on time every month, when it comes to credit cards. Applying, getting approved, and charging them up is the easy part. Paying them off, and paying on time is a lot harder.
I hope that his answer helps,
good luck and thanks for reading!
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credit analyst/underwriter
I'm thinking you asked the wrong question. What you should have asked before you apply for new credit is: "What are my chances of get XYZ credit card if I have yada yada on my credit reports and my FICO score is XXX?"
So if you haven't already applied for the card please at least know what is in your reports and what your FICO is currently. Once you have your FICO then you can register on creditboards.com and use the credit pulls database (link found at the top of the creditboards forums in the red bar). You must be registered and logged in to use it.
If you have already been rejected then you'll receive a letter telling you what CRA they used. You then send them a copy of the letter and request your credit report. Then come back here or to creditboards and ask how you can fix whatever it was that made them deny you credit.
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Don't get dejected when you find a rejection letter in your mailbox. Strange it might sound but the rejection letter brings two major advantages with it. It is a real opportunity, waiting to be exploited, provided we look towards it with the right attitude. Now, you must be wondering that what two big advantages does a rejection letter brings? Read on and enlighten yourself.
1. The first advantage that comes with a rejection letter gets its validity from a statute in the Fair Credit Reporting Act. This Act offers some good protection to credit card owners. According to this act whenever you are denied a credit for some reason, you have the right to know what circumstances or facts led to that rejection. So, if you are rejected because a particular credit rating agency has made adverse credit remarks in your credit report, the credit card company that has rejected you must state the name of related credit rating agency and their remarks to you. Further, the Fair Credit Reporting Act states that every rejected person is entitled to request a free credit report from the credit rating agency listed in your rejection letter or denial report. So, you get a free credit report. Read more from:http://www.credit-card-gallery.com/article/293,2_major_advantages_of_being_rejected_for_a_credit_card
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