Applying for a Credit Card: Ways To Increase Credit
posted on Tuesday, October 4, 2022 in Financial Tips
When used wisely, credit cards can help you achieve your financial goals in life. If you are currently applying for a credit card, some ways can help increase the credit you’ll get and your chances of approval. Read on to learn more:
Maintain a Good Credit Score
It’s no surprise that a good credit score is necessary when trying to get a credit card with a high credit limit. Being creditworthy also increases your chances of getting approved faster.
Credit scores are used by financial institutions, lenders, and credit card issuers to check the potential risk of an individual. They’re usually rated using the FICO score, developed by the Fair Isaac Corporation, on a scale of 300 to 850. If you have a rating on the higher end of the range, it means you have a good credit score.
One good way to increase your score is to have a credit card. However, your rating can be affected by your payment history and remaining balance if you don't have an existing card. You can also apply for a secured credit card. It has fewer requirements than the standard one, allowing you to build your credit faster.
Apply to a Financial Institution Where You Have a Deposit
Another thing you can do is apply for a credit card at your current financial institution. You’ll have a better chance of approval and a higher credit limit if you apply where you already have an existing checking or savings account. It also ties back to the secured credit card.
Some institutions that offer secured credit cards will require applicants to have a cash deposit. Depending on the card, you may have to deposit a minimum of $200 to $500. The deposit amount often determines the credit limit.
Don’t Apply for Multiple Credit Cards at Once
You may be tempted to apply for multiple credit cards at once, thinking this will increase your chances of getting approved. However, doing so is ill-advised because it gets reflected on your credit score whenever you apply for a new credit card. It will generate a hard inquiry on your credit report. If lenders and financial institutions see that you’ve recently had many applications, this may not look good.
It can also affect your chances if you are planning to get a loan in the future. If you wish to get multiple cards, spreading your applications at least six months apart is better.
Having a reliable credit card that you can use whenever you need it can be handy. If you’re ready for our credit card services, contact us at Community 1st Credit Union. Talk to one of our representatives to learn more about our offers.