Credit Card Glossary
Qualifying For A Credit Card
To qualify for a credit card lenders look for the following criteria –
• A history of paying in full and on time. If you pay your bills on time, you’ll look great to the lenders. If you have a lot of late payments, this can hurt your chances of getting a card, and, if the lender decides to issue you a card, it’s probably going to have a higher interest rate.
• A good debt load history- Lenders generally want to see that you are a good credit risk and that you aren’t living beyond your means. Experts say that non-mortgage credit payments each month should not exceed more than 10 percent to 15 percent of your take-home pay.
• Signs of financial stability and personal responsibility - Being at a job or an address more than two years is a sign of stability as is having a respected profession.
• A lack of credit inquiries on your credit report - Whenever you apply for a credit card, the lender pulls your credit report from one or more of the major bureaus as part of the approval process. Each time a report is pulled, it’s marked as an inquiry and stays on your credit bureau report for two years. Lenders perceive several inquiries on your report as indications that you’re desperate for loans and may consider you a poor credit risk. So, in order to beat this system, don’t allow every credit-card issuer you speak with to pull your report.
• A lack of available or unused credit. Having credit cards that you don’t use and ones with a zero balance on them can hurt your credit. Use your credit every now and then.