Before you apply for a credit card, check for six common triggers of a denial: a low score, high card balances, recent applications, a thin credit history, low income, and a credit freeze. Start at least a month ahead, so you can pay balances down and lift any freeze before an issuer pulls your report.
A denied application still costs you. The issuer’s credit check, called a hard inquiry, stays on your credit report for two years, where other issuers can see it.
Issuers decide mostly from your credit reports, your score, and the income you list, so you can spot each trigger before they do.
Pull your free credit reports from all three bureaus at AnnualCreditReport.com, then run these checks at least a month before you apply:
- Look up your score, which many card issuers show for free. Rewards cards generally require good or excellent credit, a FICO Score of at least 670.
- Add up your card balances and divide by your total credit limits. That’s your credit utilization, and the lower it is, the better for your score.
- Count the new accounts and hard inquiries your reports show from the past two years. Issuers see several close together as a sign of risk.
- Note how many accounts your reports list. Some lenders treat fewer than five as a thin file, which can make approval harder.
- Confirm the income you’ll list, which issuers weigh against your debts. If you’re 21 or older, they can count income you can reasonably expect to access, such as a spouse’s or partner’s pay deposited into a joint account.
- If you froze your credit, ask the issuer which bureau it checks and lift the freeze there, or at all three if you’re not sure. Lifting is free, and an online or phone request takes effect within an hour.
Say you owe $3,500 on cards with $5,000 in combined limits, a 70% utilization rate. Pay $2,500 before your statements close, when issuers typically report balances, and your reports will show 20%, not 70%, by the time you apply.
Then apply for one card, and wait at least six months before the next, since each application adds a hard inquiry.
If a check turns up a thin file or several recent applications, which take months to change, set a date to check again instead of applying.
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