How to Improve Your Chances of Being Approved for a Credit Card
There are so many different types of credit cards and lenders available in the UK that it makes it difficult to know which ones you’ll be approved for and how to find the best deal for the card that suits your needs.
Before you begin to apply for a credit card, there are some important factors to take into consideration first, and you’ll need to check your eligibility if you want to secure the best deal on the market and avoid damaging your credit file.
In this guide, we explain how lenders and banks decide whether or not to accept your credit card application and we provide you with 6 simple tips to help you improve your chances of being approved.
Am I eligible for a credit card?
To be able to apply for a credit card in the UK, you must be aged 18 or over, and it’s important to know that each type of credit card and deal may have its own eligibility criteria, so you should check this when comparing deals online.
For example, some providers may require the applicant to be employed and earning a certain salary or more to be accepted for their credit card, and some may want you to be a homeowner, but it all depends on the type of card and deal on offer.
If you meet the initial criteria then you should be able to apply for the credit card without any problems - unless your credit history is below average and you have other negative marks on your report then you may struggle to get accepted.
The credit card lender or bank will also want to check your credit score and a number of other things about you to assess your level of risk, and if they deem you to be a high risk applicant, then you’re unlikely to get the cheap deal you first saw and you may even be rejected. For this reason, it is important that you check your score before applying to avoid damaging it.
To learn about the approval process and the different types of credit cards available for specific needs, read our useful guide: How to Apply for a Credit Card.
How do lenders decide who to accept? - What creditors look for
Before lending money or giving credit cards to consumers in the UK, each provider will assess your creditworthiness to decide whether or not to lend to you and what interest rates to charge.
To do this, they will check your credit score and report in order to analyse your financial history, such as whether or not you have made previous credit repayments on time and in full, and if you’ve had any Court Judgements (CCJs), bankruptcies or any other negative financial ties .
If you have made risky financial decisions in the past that’s caused your credit score to go down then they will be less inclined to give one to you out of fear that you won’t pay the monthly repayments fully and on time.
So if you’re wondering how to get accepted for a credit card, be sure you check the criteria beforehand - starting with your credit score.
How to improve your chances of getting accepted for a credit card
If you’re looking for the easiest way to get approved for a credit card, try our 6 handy tips below which will give you the best chance of being accepted and securing the best deals online.
1. Check your credit score & report
Before applying for a credit card or loan, you should always check your credit score and report beforehand so you know where you stand. This way, you’ll have a better understanding of your eligibility for certain credit cards and you’ll be able to try and rectify any errors on your report that may be preventing you from getting the best deals.
Remember that if a credit card lender rejects your application because you don’t meet their eligibility criteria or you have a low credit score or poor financial history, this will have a negative impact on your rating and will make it harder for you to borrow money in the future, as future lenders will see that you’ve been rejected and will take that as a warning sign.
If your credit score is good to excellent, you will need to keep up the good work and maintain it, but if your score is below average, you’ll need to work on building it back up.
2. Build up a credit history
If your credit score needs a little work before applying for a credit card, you will need to improve your financial stability, which will, in turn, help to and open you up to better deals.
Remember, improving a credit score doesn’t happen overnight, it could take a couple of months to get back on track so the sooner you start, the better.
To increase your credit score and financial stability, try the following tips:
- Pay each and every bill on time and in full.
- Get a credit builder card (and make sure you pay it off in full every month).
- Register to vote on the electoral register.
- Remain employed with the same employer and don’t change jobs often.
- Avoid moving frequently as this suggests instability.
- Cancel any joint accounts that you may have with someone else who has a poor credit rating (or any other negative financial associates and businesses).
- Close accounts that you’re not using - The more credit you have access too, the risker you will seem in the eyes of lenders, so it’s worth getting rid of anything you don’t use.
To learn more about improving your creditworthiness and score, read our guide: How to Improve Your Credit Score in 10 Steps.
3. Reduce the amount of overall debt you have
Creditors will always want to lend to someone who has a low amount of overall debt and who doesn’t have a high credit card utilisation ratio.
To work out your credit card utilisation, add up each balance that you currently have (i.e. the amount of debt owing on each loan or credit card) and divide that number by your total credit limit value. Whatever result you get, multiply that by 100 to get the percentage figure.
For example, if you have two credit cards, each with a £2,000 limit and you owe £671 on the first card and £285 on the second, you utilisation ratio would be:
(£671 + £285) / (£2,000 + £2000) = 0.24
0.24 x 100 = 24% utilisation rate
Generally, it is recommended that you keep your ratio below 25%, as anything above this suggests you are irresponsible with money. Each lender will have differing criteria though, so you will need to keep your overall debt amount as low as you can.
If you can use savings to clear any debt then you should do so, but if you can’t, just try to keep your utilisation as low as possible and focus on clearing your debt until you improve your creditworthiness.
4. Don’t apply for too many credit cards at once
For every credit card application, each lender will need to do a search on your report to check your score, and each search will be recorded on your report, so making too many applications within a short period of time can be damaging, as lenders will think that you are desperate for credit, which ultimately makes you a higher-risk applicant compared to someone who hasn’t.
Ideally, you need to make sure you’ve done enough research before choosing a deal to apply for so that you are only making the one application. If you need to make more than one application, try to spread your credit card applications out if you can.
5. Make sure your application is correct
When applying for any financial product, such as car insurance or a credit card, you must make sure that you answer to the best of your ability.
When completing the application form, make sure you read everything carefully and input your personal details correctly. If mistakes are made or if the lender has reason to believe that you are lying about anything, they have the right to refuse your application, which will only have a negative impact on your credit score and will hinder any future credit applications.
To find out more about the steps involved with a credit card application, read our guide: Applying for a Credit Card in 3 steps.
6. Consider other options if your application has been rejected
If your credit card application does not get approved, you will need to try and understand why. As mentioned above, you can do this by checking your score and report, where you should be able to identify any mistakes or problems that need to be addressed.
In most cases, the lender will contact you via email to say why you were rejected, whether it was due to a few glitches in your credit history or too many recent applications for credit. By checking your report yourself, however, you will be able to dig deeper and learn how to recover from it, as well as consider the other options available for people with bad credit.
If you’ve been denied credit, you must not try to apply again or make any other applications with other lenders straight away - always consider your options first.
If you have a lot of debt to pay off and you are struggling financially, you should seek debt advice immediately from a free service such as Citizens Advice or StepChange, as they’ll be able to help tell you what your next best options are.
If you have bad markings on your credit report, the lender will probably give you a different deal to the one you saw initially - a more expensive one with higher interest rates and stricter terms.
Read more: 10 Hacks to Help Improve Your Credit Score
Can I get a credit card? What is my UK credit score?
You won’t know how eligible you are for a credit card until you check your credit score yourself. As soon as you do, you will have a better idea of where you stand and if you need some time to work on increasing it then there’s nothing wrong with that - simply use our tips in this article, or use the guides below to bump up your creditworthiness.
Check yours today with Checkmyfile and see the data that’s held by the four main credit reference agencies in the UK. Signing up is free for the initial 30 days, and cancelling is easy if you don’t want to pay for it after that.
Read our Checkmyfile Review for more information.
Remember, if you spot any errors, you should try to address them as soon as possible with the help available on the Checkmyfile website.