It is so easy to apply for credit cards nowadays. You can just go online, fill up a form and enter your information, then click “submit.” However, getting approved for the credit card you applied for is another ball game. You must proactively plan before you even consider applying.
Here are tips on How to get unsecured credit cards.
Know your credit score
Your credit score is important because it is one of the factors that card issuers look at to decide whether to approve your application or not. There may be some variations depending on banks you have accounts with, credit card scores are usually classified by lenders as so:
300 – 629 Bad Credit
640 – 689 Average Credit
690 – 719 Good Credit
720 – up Excellent Credit
Credit cards issuers require excellent or good credit. If you are struggling in maintaining good credit, then you should consider putting off your application until you get your finances back in order. This can be done by:
– paying debts on time
– keeping the balances low on any credit card that you have
– avoiding any kind of debt
Another alternative is to get unsecured credit cards. These may be considered as good cards for those who have bad credit. There are also multiple credit scoring models which are FICO Score and Vantage Score. FICO scores are the most commonly used by lenders to make their decision on credit scores. The VantageScore model was eventually developed to serve as FICO’s competition.
Your debt must be reduced
30% of your credit score is gauged by your debt. High balances on credit cards can damage your credit history. The credit utilization ratio – which is your balance divided by credit limit – must be less than 30% on every credit card that you own. Here’s an example, if you have a $10,000 credit limit, you must keep your balance less than $3,000.
Lower your credit utilization by having a budget in order for you to pay your balance as soon as possible. You should also consider paying your debt more than once a month so you can also keep your balance low for the rest of the month.
Don’t immediately apply for the first offer that you see
If you do not have good credit, it may be difficult to be approved especially for cards that have large sign-up bonus offers as well an s reward structure that is lucrative. Each credit card application eventually is reflected on your credit report. If you are unsure, you can inquire with the card issuer about the requirements of that specific credit card.
Include all your income when you’re applying
Credit card scores are good indicators of your total creditworthiness. However, it does not tell lenders about your income. Credit card issuers must know this so that they can calculate the debt-to-income ratio which also determines whether or not you can make payments. You can lower this ratio by decreasing debt or increasing income.
Those who have been denied credit cards can say that the rejection has an effect on their credit score as well as psychologically. Therefore, it is important to look at your credit situation before you even apply for a card.
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