The challenging economic scenario and a pressed disposable income are two major contributors to the inclination of individuals towards credit cards. Thus, due to its increasing prevalence, the number of credit card applications is also on its rise. It makes lenders’ application assessment process tighter, and hence the possibilities of application rejection might go higher as well.
However, some careful measures can provide instant credit card approval to applicants. With proper deliberation of credit profile and behavior, individuals can reduce the chances of application denial. A few typical reasons for rejection are numerous applications and multiple loan accounts, irregular previous payment history, unstable earnings, etc.
So, here are some of the tips that borrowers can utilize and increase their chances of instant credit card approval.
- Avoid multiple credit card applications
Multiple numbers of applications invite several hard inquiries on an applicant’s credit profile within a shorter period. These inquiries may raise questions on applicants’ qualifying abilities or the tendency of obtaining debts. Both these reasons can create a negative impact on the profile.
From the lenders’ point of view, it increases the chance of default in payment when individuals are likely to take multiple debts at a time. That means, their financial risk can be at a higher stake. So, individuals should apply as per their credit history to avail an instant credit card.
- Check the credit report before applying
Before applying for any card, borrowers should check through their credit report to ensure the accuracy of records. Usually, these reports do not contain any errors. However, any mistakes can reduce the eligibility of applicants. So, if you can spot any error, it is better to apply for rectification to increase one’s eligibility to get credit cards.
- Apply as per eligibility
Premium, feature-rich cards come with higher credit score requirements above 750. Therefore, a score below 750 is one of the reasons why credit card application can be rejected. So, as an alternative, they should opt for a card that is compatible with their current credit rating for higher approval chances.
- Pay the bills and dues timely
A fundamental component of credit profile points to the payment history. Timely bill payments of any loan accounts suggest responsible and organised credit behavior of individuals. So, borrowers should emphasis on timely repayments of all existing loans as it can imprint an excellent credit report that can secure instant credit card approval.
- Pay attention to the credit utilization ratio
While approving a card, financiers look at the credit utilization ratio as it signifies the credit habits of borrowers. Thus, individuals are advised to keep a ratio of 30% to get a credit card. For example, if the credit limit is Rs.10,000, users must not exceed Rs.3,000 in their credit utilization.
- Try to hold a balanced mix of credit lines
A balanced mix of both secured and unsecured credits with regular and timely repayments also indicates a responsible borrower. It signifies the borrowers’ ability to handle a range of advance lines and increase lender reliability.
- Avail a secured credit card
Individuals with no previous track records of borrowing may also receive rejection if applied for traditional credit cards. Thus, they should opt for secured credit cards to initiate a credit profile creation.
This type of credit card does not require a high score as applicants need to provide security to avail the card. In this case, the credit limit equals a percentage of the security’s value. With an in-time repayment history with this card, users can create an appreciable profile to obtain an unsecured card.
However, individuals should research thoroughly about the cards to understand their fees, reward programs, interest rates, and the likes before applying. Opting for a card can be ideal for individuals who prefer an all-in-one card.
Are you worried about credit card approval? Follow these tips
While opting for any credit card, individuals should be aware of the odds of approval for an instant credit card. Firstly, it can narrow down the search for cards and save both time and effort. Secondly, restricted applications can also negate adverse impacts on the credit profile.
Here are some tips that can enhance the approval chances –
- Make limited applications
Every card application invites a new hard inquiry about the credit history of applicants. Such inquiries impact the credit score adversely. Therefore, lesser applications mark better chances to avail credit cards.
- Look for credit report errors and apply for rectification
As a credit report is considered one of the primary measures to weigh card eligibility, individuals must look for its accuracy. Any mistakes should be corrected before applying for a card to enhance the eligibility. To obtain higher approval possibilities, individuals should send applications for those cards that match their current qualifying criteria.
- Make timely repayments
Most importantly, borrowers should repay all their existing credits in time. It shows responsible credit behaviour that helps to maintain an excellent repayment history over time. They should always try to avoid default in payments and opt for total credit card bill clearance before the due date.
- Maintain a low credit utilization ratio
The credit utilization ratio signifies the ratio of utilized debt to available credit. Cardholders should always maintain a credit utilization ratio below 30% to maximize their eligibility for premium cards like the Bajaj Finserv RBL Bank Super Card.
- Opt for a secured credit card
Using a secured credit card initially to build credit history with timely repayments can be a smart way to receive an unsecured credit card.
Utilizing these tips before sending your application can significantly help in instant credit card approval.