- Have you had difficulty obtaining approval for credit card? It may be because your credit is not in the best place, although some credit reporting services can tell you have good credit.
- If you don’t have a credit history, have more credit card debt as long term debt, or having negative scores on your credit report like bankruptcy, you could be denied the best credit card deals.
- By understanding how negatives keep you from getting more approvals, you can make changes that will improve your odds over time, earning you more rewards for your daily spending.
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If you have “good” credit but continue to be refused for big bonus points and miles from credit cards, or if you’ve noticed a drop in the number of “pre-approved” offers mailed to you, it may have everything to do with your credit report.
It is quite possible to believe that your credit is in the right place, but banks and other lenders may see it differently.
Getting your credit score up through one of the many free services can present an optimistic view of your credit history and where you are today. However, even if you pay your balances on time and try to use your available balances responsibly, your reports may not be as stellar as you think. The result is often lower FICO scores and mixed ratings of your standing in all three credit bureaus, resulting in rejections.
What is preventing you from getting the credit you deserve? More importantly, how can you improve your situation and start receiving rewards for your spending? Before submitting another unsuccessful application, first check these three situations.
You don’t have a credit history
Before the banks give you your own line of credit, they want to make sure you can take responsibility. With a history of good spending and low balances, you could qualify for the biggest bonus offers and the best credit card rates. Until that time comes, you may be denied the best credit card deals.
If you’re just building your credit history or recovering from bankruptcy or written off debts, think carefully about your application strategy.
Earning rewards with top credit cards is a marathon activity, not a sprint. Before asking for the best cards in the business, start with cards with no annual fee or cash back to build a solid report. With good usage and regular spending, it’s pretty easy to switch to top tier credit cards.
You have too much “bad” debt
When banks look at a credit report, they look at two different types of debt: good debt and bad debt. “Good” debts are long-term loans on large purchases, such as houses, cars, and even student loans. If you have one in your name and responsibly pay them off each month, your credit score and overall report is in a much more favorable space with lenders.
On the other hand, “bad” debt is your current balance on credit cards or store credit. High balances and late payments can hurt your credit score and disqualify you from the best credit card options. Before mounting another claim, start paying off your balances to get your credit in a better place.
It is important to note that “good” and “bad” debt are not mutually exclusive. If you have many different credit cards but your overall usage is low, your credit score will go up and put you in a prime position to get the credit card.
. But if you only have two or three credit cards that are still being used to the max, your credit score will go down.
Your credit history is not stellar
Everyone has a hard time.
With bankruptcy or debt written off on your credit report, lenders may be wary of approving you for their best credit products. The good news is that everything passes over time, including bankruptcy. If you have bad credit scores today, that’s okay. Most negative reports drop off your credit report in seven years.
What is more important is how you treat your current lines of credit during this time. By keeping balances low and buying responsibly, you can get approval for better credit card deals, giving you more rewards than you can use in your everyday life.