Summary:
When applying for a Credit Card the potential issuer will look at information such as your credit rating, salary, occupation and other forms of credit. |
Qualifying for a credit card gets easier as each year passes. A good example of this is with Gold Cards. When they were first introduced, about 15 years ago, they really were exclusive, strictly reserved for high earners. But now as long as you earn over the average national wage (about £26k) the banks will probably want to offer you multiple Gold Cards!
Whatever the case, as long as you have a regular paying job or income, and your credit rating is not toxic then you'll have no problem being accepted for a Card.
How To Qualify For a Credit Card – What The Banks Look At
1. Your Credit Rating
This is the most important factor. Almost everyone in the country has a credit rating which are provided by two credit rating companies, Experian and Equifax.
These firms collate financial information such as your payment history (on all loans or credit, not just with Credit Cards) and whether you have any County Court Judgement etc. If in the past you've always been late with payments of another credit card or mortgage etc then this will likely give you a low credit score and will be considered whenever you apply for credit.
2. Credit Enquiries
Every time you apply for a loan, mortgage, credit card etc an input, called a ‘credit enquiry’ will be entered on your credit file. The number of 'checks' you have and the time period is significant. Apply for too much credit over a short period of time, perhaps a month, and it won’t look good. This is because the credit agencies will interpret it as a sign of despair. Why else would the average person apply for 2 loans and 3 credit cards within a month?
So if you want to apply for a large amount of credit from different banks try to spread them out over several months.
3. Other Debts
Perhaps you have a mortgage as well as a car loan. Facts like this will be considered. Too much debt is normally seen as a negative.
4. Salary & Occupation
Generally the higher your salary the more credit will be available to you. But the job you do is also important.
Being a lawyer for example is not a high risk job because of the ease of finding and staying employed. But if you're a Motorcycle Courier it’s a different matter.
5. Your Property
If you own your home then this is good news, even if you have a mortgage. Credit Card companies also like people who've lived in their residency for many years because this promotes 'stability'.
6. How Many Other Credit Cards You Have
If you have 5 other credit cards then this is relevant because it might mean one of two things –
- You’ve already got large negative balances, or
- You may have no negative balances but have instant access to large amounts of credit should you need it
If you therefore have credit cards with zero balance on them that you're not using, consider cancelling them. You can always apply again and your credit rating is a small plus.
