If ghosts and goblins weren’t bad enough this Halloween, the sight that credit card users might actually fear is the mailman. If you’ve recently applied for a credit card, then your mail carrier may be delivering one of the most frightening letters you can get: a credit card rejection notice.
How to Avoid These Scary Letters
Whether you are asking someone out on a date, looking for a new job or applying for a personal or business credit card, everyone hates being rejected. And when your application for new credit is declined, you will likely be notified by mail.
Thankfully, there are several things that you can do to help your chances of being approved for your next credit card.
Only Apply For Credit Cards That You Can Qualify For
An easy way to avoid rejection letters is make sure that you’re applying for a card that you’re qualified to receive.
To find the right card for your, be sure to check your credit score first, and then see how it correlates with how the card is marketed. For example, if you have a limited credit history, or poor credit, then you shouldn’t bother applying for a premium rewards card that’s designed for those with excellent credit. If you have a very limited credit history, then you’ll want to start with a very basic credit card that doesn’t offer rewards. If you have a poor credit history, then you might need to start with a secured card. A secured card works much like a standard, unsecured card, but it requires the payment of a refundable security deposit before your account can be opened.
Pay Down as Much of Your Outstanding Balances as Possible
When a card issuer is deciding on your credit card application, one of its most important considerations is its exposure to default. When it looks at a copy of your credit report, it will be much more likely to approve your application if you have don’t have large outstanding balances.
But what many people don’t realize is that their credit report will show all of their most recent credit card’s statement balances as debt, even if they always avoid interest by paying their balances in full. To reduce the amount of debt indicated on your credit reports, you can pay off your outstanding balances before your statement period closes. When you do this, your credit report will show a zero balance on your cards. It’s also important to pay down any current balances on other accounts from the same issuer as the one you are applying for.
Include All Eligible Income on Your Application
Credit card issuers also place a lot of importance on your ability to repay a loan, and want to see sufficient income. Unfortunately, many credit card applicants will fail to include all of the sources of income that they use to qualify for a credit card. In addition to your business or employment income, you can also include investment returns, Social Security or pension income, retirement fund distributions, inheritance or trust fund payments, unemployment benefits, alimony, and child support. Also, federal regulations say you can include the income of your spouse or domestic partner, so long as you have a reasonable expectation of access to those funds for repayment of your loan.
Reach Out Directly to the Card Issuer
If your credit card application isn’t initially approved, you can take one last step to avoid flat out rejection. Contact the credit card issuer, and ask to speak with a reconsideration specialist. Most card issuers have these representatives which can approve your application over the phone, even if their system had originally rejected it. You can use this opportunity to include additional sources of income that you originally failed to include. And if you have other accounts open with the same issuer, you can also request to have some of those credit lines transferred to your new account, or even to close another account that you don’t need. This allows the card issuer to approve your new account without increasing its exposure to default.
Most adults have long since outgrown the fear associated with the scary symbols of the season, but the fear of rejection can last a lifetime. By taking these simple steps, you’ll be doing everything you can to avoid receiving that scary letter from a credit card issuer.