A credit card offers you the perfect opportunity and flexibility to make any financial expenditure. Additionally, it offers you the opportunity to borrow funds from the bank or financial institute, wherein which, you can repay it back within a fixed period. However, when it comes to applying for any of the credit cards, there will be certain factors you need to consider. One of these factors includes your credit score. But how does it play a role in your card application?
For one, you might be in for a rude shock, if you find that your application had been rejected, or card rates that are unaffordable. This is where the credit score will come into play. Your lender will take into consideration your credit score, the basis of which, the appropriate card rates will be provided. If your credit score is low, there is a high chance that your application will be rejected, or you will get card rates that go beyond what you can afford.
While the acceptable limit for a credit score is 650, a score higher than 750 will help you get a better credit card rates. If you think your score is lower than the above-given rates, here are few steps you can take to ensure that your card application is approved right in the beginning:
Check to see if your repayments match: The first factor you need to check is your repayment history of any financial products you have borrowed. In other words, if you have applied for a loan or any other financial products that include borrowed funds, you need to check the repayment history. The reason behind this is that the details of your credit score will come mainly from your lender. If there are any discrepancies in your repayment history, your lender will normally send it to CIBIL. Therefore check to see if your repayment history is matched along with the lender’s to eliminate any possibility of inconsistencies. In the event there are, you can take the appropriate steps to change it.
Repay all current debts: While your repayment history can affect your credit score, so can your current debts. That is because any debt you take on, you will need to have the ability to repay it back. Your credit score indicates the amount of debt you current have, and whether you have repaid it or not. Taking on any additional credit cards is equivalent to taking on additional debt, whether you use it regularly or not. So to improve your chances of getting your card application approved ensure that all your debts are paid off. If you can’t pay off the major debts, ensure that the smaller ones are paid off. Once your debts are paid, ensure that the lender’s system is updated before you begin the application process for the card.