Key Points:
- Credit card approval is not guaranteed for everyone and depends on various financial habits and history.
- Five common unhealthy financial habits that can lead to credit card denial include: having a bad credit file rating, not meeting income requirements, having delinquent accounts, having a short and unstable financial history, and having too many credit file inquiries.
- To improve chances of credit card approval, one should work on rectifying these habits by paying bills on time, ensuring a consistent income stream, clearing delinquent accounts, maintaining stable employment, and minimizing unnecessary credit inquiries.
Not every one of us has good habits; some of us enjoy our high calorie high cholesterol fried chicken and creamy mash potatoes whereas others enjoy spending their money buying things that they simply can't afford. While the former habit leads to high blood pressure and alarming cholesterol levels the latter lands you in debt which is one of the reasons why credit card companies turn their nose up on your applications and simply reject them.
According to popular belief acquiring a credit card is a given in todays' economy, what we seem to forget is the fact that in reality not everyone can get approved for a credit card, one has to earn this privilege by keeping their financial decisions squeaky clean.
In order for you to maintain the financially healthy habits that credit card issuers are looking for, you need to do two things; first you need to recognize what exactly these bad habits are and then you need to understand what these habits entail so that you can fix them and do so a.s.a.p.
Step # 1: Recognizing Your Bad Habits
If your credit card application has come back with a red DENIED stamp on it, chances are that this is so because of the following five reasons aka your unhealthy financial habits.
- You have a bad Credit File Rating
- You don't earn ample income according to the issuers' stipulation
- You've had delinquent accounts
- Your financial history is both short and unstable
- You've had a large number of queries on your credit file
Step # 2: Understanding These Habits
In order for you to maintain healthy financial habits to acquire a credit card you need to understand exactly what the unhealthy habits are so that you can stay as far away from them as possible.
Unhealthy Habit #1: To Have a Bad Credit File Rating
Having a bad credit file rating basically means that lenders have had problems getting money from you, all these problems get recorded in a national database and then there are available for any potential lender to see.
So, if you've paid your bills late, this information will be put permanently on your credit file and no credit card issuer will feel very confident issuing you a credit card.
To overcome this unhealthy habit just remember to, “Pay your Bills and do so on Time”.
Unhealthy Habit # 2: To Not Have a Proper Income Stream
This is not true for all credit card issuers but a majority of them will maintain that you have a certain amount of income before they approve you for their credit card.
For example to become eligible to get an American Express Platinum credit card one needs to earn a minimum of $100, 000 per annum, and if you don't earn this amount per year it wouldn't matter if you've paid all your bills on time and have an excellent credit file rating you wouldn't be approved for the credit card.
According to Bill Haderkopf, a Forbes contributor every credit card company sets their own eligibility income level. Credit card companies that are looking to attract a younger audience try to make this limit as low as possible.
Having a checking account at the bank you are seeking a credit card from helps a lot when it comes time to get approved for a credit card.
Unhealthy Habit # 3: Having Delinquent Accounts
A delinquent account is an account whose payments are past their due date, this record also becomes public for lenders and they aren't likely to trust you with paying their payments if you've failed to do so in the past.
The history of delinquent accounts is wiped out every five years.
Again, make sure you make all your payments in time.
Unhealthy Habit # 4: Having an Unstable Financial History
A short or unstable financial history can get you disproved for a credit card, this basically means that if you're in the habit of constantly changing jobs, this will show up as a red flag on your credit file as this will be seen as a sign of unreliability.
And if credit card issuers are looking for one thing, it's reliability.
Make sure to have a solid employment record before you apply for a credit card, this should be true for at least 6 months if you want to be considered for a card.
If you have bad debt try paying off all your debts before you apply for a credit card, because when the issuers will see that you're correcting your past wrongs they'll be more eager to issue your credit card.
Unhealthy Habit # 5: Having too many Credit File Inquiries
Each time you apply for a loan or a credit card for that matter everything is saved on your credit file and if you've had too many refusals from past lenders potential lenders aren't really excited to approve your credit card application.
Before you apply for a credit card make sure you get everything mentioned above in order because this is what will increase your chances of being approved.
