In today’s day and age, a credit card is one of the most important payment tools. No matter where you go, the convenience and perks that a credit card offers are unmatchable. It allows you to make cashless payments across places and platforms. Furthermore, with every purchase you make, you get to earn reward points. These reward points can be redeemed for gifts, vouchers, and more.
With specific types of credit cards like travel credit cards and shopping credit cards, you can save a lot more on purchases than you can ever do with debit cards. Taking all of these aspects into consideration, it is no surprise that people want credit cards. But in order to get a credit card, your application needs to be approved by the card issuer.
During the approval process, a lot of emphases is given to the applicant’s history as a borrower. This includes things like their credit score, repayment history, credit history, and existing debt. After taking all of these factors into account, the issuer decides if you’re worthy enough to be a borrower.
Sometimes, issuers also pre-analyze your existing debt history and credit history to offer pre-approved credit cards. You don’t need to apply for these credit cards but they are offered to you by the issuer. A few easy tips can make sure that this happens for you too. Here are 5 tips you need to follow to ensure that you get a credit card pre approval against your name.
- Build a good credit score
Everything in the world of credit cards ultimately boils down to your credit score. Your credit score is a three-digit number assigned by the credit bureau. The credit bureau looks at your credit profile, credit history, and payment history to determine how “creditworthy” you are. It goes without saying that the higher your credit score, the better you are as a potential borrower.
There are various ways to improve your credit score. Here are some you can follow.
- Pay your credit card dues on time. It is one of the most effective ways to improve your credit score over a period of time.
- Clear your dues. If you have credit card dues accumulated over time, clear them. This will be the first step towards getting a higher credit score.
- Maintain a credit utilization ratio of below 30%. Your credit utilization ratio is the percentage of your credit limit that you actually borrow every month. If you borrow a huge amount using your credit card, it implies that you are highly dependent on the credit line. That will give the issuers a negative impression of you as a borrower. On maintaining a credit utilization ratio of less than 30%, you will come across as a responsible borrower who can handle additional credit.
- Repay your dues on time
This is one of the most basic pieces of advice you can get. Repaying your dues before the due date will slowly build up a good credit score over time. This includes your credit card bills as well as the EMIs of your loans. Being a defaulter can severely damage your profile as a borrower.
This is why you should always set reminders for when your credit card bills and EMIs are due. Save throughout the month, cut down on expenses and make sure to pay them on time.
- Clear your existing debts
Having too many existing debts usually works against you. Thus, credit card companies will not be willing to give you a pre-approved credit card offer. The best way to manage this is to clear your existing loans. You can save up for them over a few months or use your savings to clear them.
- Take care of your existing credit cards
All your credit cards, including your old ones, serve a purpose. They add to the length of your credit history, which in turn boosts your credit score and portrays you as being trustworthy to the credit card issuers. Therefore, keep all your credit cards, even if they are not active.
- Do not apply for a credit card right after rejection
This is one of the biggest mistakes people make. Applying for another credit card right after rejection can make you seem desperate for credit. This is not a good look on you as a borrower. Therefore, once you get rejected, wait a month before you apply again.