How To Apply For A Credit Card (And Get Approval)

Know your credit score. A credit score is a three-digit number calculated to determine the relative quality of a consumer’s credit history. You can check your credit score through a credit card issuer or by ordering it from any of the three main credit agencies: TransUnion, Equifax or Experian. You are entitled to at least one free credit score from each agency per year.

Your credit score is affected by many factors, such as your payment history, outstanding balances, utilization and credit line history. Each bureau uses a slightly different model, so expect slight differences in score agency to agency. The scores should all be within a narrow range though so if one of them skews significantly from the others, look for a mistake you should correct.

If your score is significantly different from what you think it should be, review your credit report carefully. Look for errors or delinquent payments that might be dragging down your score.

How Do You Check Your Credit Score for Free?

You can check your report for free once a year at AnnualCreditReport.com with each of the three major credit bureaus. This will give you a detailed report of your credit history from each of the three major reporting bureaus. Through December 2023 you can get a free report once a week.

Many major credit card companies, financial institutions and loan servicers offer a monthly credit score for no extra fee for cardholders. You can often simply log into your account and check your credit score. Keep in mind different issuers use different scoring methods which means you may have slightly different scores across different cards.

What’s a Good FICO Score?

Lenders use your credit score to assess what level of risk you’ll pose to them when it comes to paying down your balance. Many lenders use a FICO scoring model to generate your three-digit number. The higher your score, the better the offers you’ll generally receive.

Defining an exact threshold for what constitutes a good credit score can be complicated, since it depends on the scoring model the lender is using and the type of loan you’re applying for.

Base FICO Score Credit Ranges

What’s a Good VantageScore?

Launched in 2003, VantageScore is a joint venture among the three major credit reporting agencies—Equifax, TransUnion and Experian.

VantageScores use the same 300 to 850 credit score range as FICO Scores. The higher your credit score on the VantageScore scale, the lower the risk you represent to lenders. VantageScores define 661 to 780 as its “good” range and 781 to 850 as “excellent.”

How To Improve Your Credit Score

There are steps you can take to improve your credit score. First, check your credit report for any mistakes.

The next move is to make sure you make your monthly payments on time, every time. Your payment history is the biggest contributing factor to your score, accounting for 35% of how it’s calculated.

Finally, aim to keep your credit utilization as low as possible. This means keeping your balance on any card as low as possible relative to the amount of your credit limit on that card. For example, if you have a card with a $10,000 credit limit and you make a $2,000 charge you’d be using 20% of your available credit. Most experts recommend keeping your utilization below 30%.

You may also want to consider using tools like Experian Boost or Amex’s Score Goals, which can use your on-time payment information for other types of accounts, like utilities or your wireless bill to potentially improve your credit profile.

How To Pre-qualify for a Credit Card

Many issuers, including American Express, Bank of America, Capital One, Chase, Citibank and Discover will let you check to see if you’re pre-qualified or preapproved for credit cards. Remember that a match from a lender doesn’t ensure approval, but it does mean the lender—guided by some basic credentials—believes you have a good shot.

The lender likely found your information on a credit reporting agency’s list of reliable consumers or did a soft pull on your credit report. A soft pull or inquiry, which is less likely to affect your score, gives a lender access to basic information but isn’t recorded as a hard inquiry, which can negatively impact your credit score.

Documents Required for Credit Card Application

You will need to provide your personal information and copies of certain documents to apply for a credit card, including your:

1. Legal name
2. Social Security number (SSN) or Individual Tax Identification Number (ITIN)
3. Mailing address
4. Birthdate
5. Employment status
6. Income information
7. Debt information
8. Permission to pull your credit history

The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) of 2009 also requires an applicant to be at least 21 to apply for a credit card, (or 18 with proof of independent income).

Before you apply for a new card, improve your chances by clearing up any outstanding debts. If you have any past due or delinquent accounts, pay them off as soon as you can.

Also aim to decrease your credit utilization ratio. Being at the limit on your other lines of credit could adversely affect your credit score. Ideally, you should use 30% or less of your available credit across all credit cards and on each individual account. In general, the less of your available credit you’ve used, the better for your overall profile.

Set realistic expectations and look for a card for which you’d receive approval. Premium cards are generally designed for those with top-notch credit and the income and resources to near guarantee regular payment. If your score is more middle of the road, consider a card meant for those with fair credit or good credit. Over time, your good payment behavior will help increase your score and you may then qualify for a higher-end card.

How To Become an Authorized User

One option if you’re starting to build credit from scratch or if you’re looking to bounce back from credit problems is to become an authorized user on someone else’s account. This means you’ll gain access to a credit card in your name that’s attached to someone else’s account. Typically, a parent will allow a child to become an authorized user on a credit card to get started and to learn responsible credit usage.

The family member or friend authorizing you to use his or her account has to notify the card issuer. Name, Social Security Number and date of birth will be required. Different issuers have different age requirements to add an authorized user.

Once you’re ready to apply, it’s time to decide which type of credit card will be the best for your individual needs.

There is no perfect credit card, but considering where and how you spend your money may help you find a match, especially when it comes to category-based reward earning.

Decide Among Low Interest, 0% APR or Rewards

Generally, you’ll want to choose from one of the following options:

• A low-interest card: This type of credit card has a lower-than-average annual percentage rate (APR) and is best if you think you’ll have to carry a balance from time to time, as it will reduce the amount of interest you pay. However, we never recommend carrying a balance if it can be avoided.
• A 0% APR card: This comes with an introductory 0% APR offer on either purchases, balance transfers or both and is best for someone with some existing debt looking to pay it down or someone who has to make a big purchase and wants a little breathing room to pay it off.
• A rewards card: These earn rewards in the form of cash back, points or miles based on a percentage of spending. The rates vary. Rewards cards typically require good to excellent credit.

Cash Back vs. Flexible Reward Points

When you’re trying to decide between a cash-back card or a flexible rewards card, it’s important to determine if the card’s rewards align with your spending habits. Someone who rarely flies, for example, may not benefit as much from a premium travel card that earns miles redeemable for future flights.

For more flexible rewards, a cash-back card might be the right choice. But for someone who is frequently on the go or who wants some travel perks, it might be worth applying for a travel card that offers benefits like airport lounge access or free checked bags.

Issuer-Exclusive vs. Co-branded Credit Card

If you think a travel card is right for you, decide between a general travel card or a co-branded one. A general travel card earns flexible rewards you can use toward any flight, hotel or many other types of travel. Examples include an American Express card which earns Membership Rewards points or a Chase card that earns Ultimate Rewards® points. Cards like these typically earn points that can be redeemed through the issuer’s travel site for travel in multiple ways.

Co-branded cards will earn rewards in the currency of the card’s brand, like Marriott Bonvoy points, Delta SkyMiles or Southwest Rapid Rewards. With these cards, you generally get the most value in using your earnings toward future flights or hotel stays, although in some cases you can transfer your miles to another airline within the same airline alliance.

1. Visit the issuer’s website. Or if you prefer, you can apply in person at a local branch or over the phone.
2. Submit an application for a new card.
3. Await approval.
4. Receive approval decision.
5. If approved, wait 5-7 business days to receive your new card in the mail.
6. If denied, consider calling the credit card issuer’s reconsideration line to see if they’ll reverse their decision.

Usually, the fastest way to apply for a credit card is via the bank’s website. If you’re applying online, you should get an answer quickly. Applying in person or over the phone may lead to a longer wait time.

Think About Your Needs

Before applying, consider your goals with the card. Do you need the card to help establish credit? Earn rewards? Pay off some debt? Knowing your goals will help you narrow down options. For example, if you want an easy-to-use cash-back card, the right fit could be one that offers the same flat rate on all purchases. Someone seeking their first credit card may fare best with a secured credit card.

Preapproval

Sometimes credit card companies will send offers saying you’ve been preapproved, a term often used interchangeably with pre-qualified. In reality, there’s no way to be approved for a credit card without any action taken on your part.

A preapproval notice does mean that you’re more likely—but not guaranteed—to get approved. If you have a credit card from one bank and you’ve been demonstrating good financial behavior, the bank may send you a pre-approval offer for another card.

Be Prepared for the Impact on Your Credit

Nearly all credit card companies—except for a handful targeting those with poor credit—will make a hard pull or hard inquiry on your credit report. This means the bank’s inquiry will appear on your credit report and will likely negatively affect your score.

Too many hard pulls in a short time will have an adverse affect on your credit score, as it can signal to lenders you’re seeking too many lines of credit at once.

Have a Repayment Strategy

Develop a plan to make payments on time. One strategy is to “set it and forget it” by establishing automatic payments from your bank account each month. You might also make a note in your calendar before the due date to make sure you don’t accidentally skip a payment.

Before you apply, make sure you understand the card’s terms and conditions listed in the fine print of the cardmember agreement. Once you are approved, be sure to know what credit limit you were approved for, when your billing due date is and what the APR is should you plan to carry a balance. We never recommend carrying a balance—it’s always better to pay in full on time every month if possible.

All credit card agreements are required by law to clearly display a rates and fees table—called a Schumer box after the Senator whose involvement in the Truth in Lending Act led to the standardized format—that clearly outlines any fees associated with your card. Some things you can expect to see in a Schumer box include:

• Annual fee
• APRs on purchases, balance transfers and/or cash advances (if applicable), and whether those rates are variable
• The minimum amount you’ll be charged each month if you carry a balance
• Any penalty APRs or fees, should you miss a payment or pay late
• Balance transfer fees, if any
• Foreign transaction fees, if any
• How your finance charges are calculated

In addition to the Schumer box, you should also familiarize yourself with the rest of the card agreement, as it outlines additional details about your card.

If you have a rewards card, the card agreement will outline the rewards rate, what purchases do and don’t qualify for rewards and any other pertinent details of the rewards program.
If the card has an introductory 0% APR, the agreement will outline the exact details of the offer, including how long you have after opening the card to make a transfer or purchase without incurring interest.

If the card is designed to help improve your credit—as is the case with many secured cards—the agreement may include information about how to increase your credit limit with good payment behavior or even how to graduate to an unsecured card.

If your application is denied, the issuer is required to inform you—in writing—of the reasons for the decision and to tell you which credit bureaus they used to pull your information. If you don’t think the reason you are given is valid, review your credit report with the bureau(s) the issuer used. There could be an error or outstanding issue you were unaware of. It would also be a good idea to make a reconsideration call if you think an error was made.

If you were denied a credit card because your overall credit rating was too low to meet the card’s criteria, your next step is to work on improving your credit score. Here are a few helpful things you can do:

• If you have any past due or delinquent accounts, pay them off as soon as you can.
• Decrease your credit utilization ratio. If you’re nearly at the limit on your other lines of credit, it will adversely affect your credit score.
• Look for a card more aligned with your credit score. Over time, your good payment behavior will help increase your score and you may then qualify for a higher-end card.
• Don’t apply again right away. Although one credit inquiry will have a small impact on your score, multiple inquiries within a short period of time can have a more significant effect. Allow some time to pass before you apply again.

Opening a credit card account can be a smart money move, but applying for a credit card you’re not likely to qualify for or getting a card that isn’t a match for your spending habits is often a waste. Take the time to figure out your credit standing and evaluate what type of card might be best for you.