Do Not Do These Things When Applying for a Credit Card

Do Not Do These Things When Applying for a Credit Card
0 comments, 09/09/2015, by , in Credit

As with taking out any type of loan, applying for credit card requires you to be prepared, especially if you do not have a good credit history. Also, a few activities, including those that are not obvious, can impact your chances of getting approved for a new card. According to financial advisors and lenders, the worst moves you can do to spoil such chances are:

  • Applying for a Lot of Credit Cards

Usually, an analysis of your new credit would make up 10% of your score, which can be dragged down by multiple credit inquiries. You might want to shop around for the best deals and see who will approve you for a card, but you should think twice before going on a mass application spree. So, how many is too much? Put in mind that more than two inquiries would be enough to raise a yellow flag, and five or six would definitely get you into the red-flag territory.

  • Letting Your Credit Score Slip

Credit card companies will surely look at your score in making their final decision on whether you get a card or not. Gone are the days when these companies offer credit to low-scoring applicants, and lenders now differ widely on their cut-off points. This means that it is best for you to understand how to determine if you are a good candidate by only applying if you have a credit score over 650, as this number are accepted by most credit card companies, with some charging higher interest rates.

  • Missing a Payment

Remember that paying on time will account for the biggest chunk of your credit score, usually weighing in at 35%. Some credit card holders learned this lesson the hard way, missing a payment deadline by just hours and paying interest rates of up to 30% overnight.

Aside from the ones mentioned above, make sure you are not co-signing with someone who is financially reckless, using too much credit, having many subprime loans on your report, failing to check your credit reports for errors, avoiding credit altogether and changing job too many times.

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