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What Credit Card Companies Look At When You Apply For A Credit Card

What Credit Card Companies Look At When You Apply For A Credit Card Posted on December 3, 2019Leave a comment

Applying for a credit card isn’t something you do without thinking – there is a possibility of risk involved in doing it. Not everyone who applies for a credit card gets accepted. Overall, credit card applicants have an average approval rate of 39.1%… but what actually helps you get approved for one?

Your credit score

Your credit score is usually used by credit card companies to evaluate whether or not you have creditworthiness. Don’t fret, if you don’t have a good credit score, this isn’t the only thing they look at. But it is important.

If you have bad credit, this can show to be a risk to the credit card company. It lets them know how likely you are to repay your debt. If you have a good credit score, you’re more likely to get approved – but this isn’t the only factor, and just because you have a good credit score doesn’t mean you’re approved.

How many delinquent accounts you have

Credit card companies also consider how many delinquent accounts you have in your credit report. Any account past due is a delinquent account; but many creditors won’t report an account as delinquent to the credit bureaus until at least 30 days after the missed due date.

If you have late payments, most creditors won’t feel as though you can be trusted with their money. A late payment can stay on your credit reports for up to seven years from when it occurred. Meaning, it can drop your credit score, too.

Hard inquiries

A hard inquiry is when a creditor checks your credit score before deciding whether or not to approve you. This inquiry can stay on your credit report for about two years.

Multiple hard inquiries on your reports can be a red flag for credit card companies. This can be a red flag because it could show that you are opening a lot of accounts because you are low on cash and are looking to credit cards as your primary payment.

How much credit you are using

Even if you’re making all your payments on time, you could still be considered high risk.

Your credit utilization reflects how much of your overall available credit you are using. The recommendation is less than 30% of your total credit limit.  If you consistently use more than 30 percent of your total available credit, it could be a warning sign to a credit card company that you may have trouble repaying the money you borrow.


You may be asked to disclose your income as part of your application. This is because the card issuer will look at your income relative to your debt.

Credit history

If you don’t have much credit history, your chances of getting approved might be lower. Having good credit history shows you are an experienced and reliable borrower who can repay debts.

If you are responsible with credit and pay off your debt on time, you shouldn’t have an issue with getting approved. Always remember that good behavior goes a long way with credit card companies. That being said, if you haven’t had such a good history, there’s time to build up your credit score and show companies that you can be responsible.

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