7 Things Credit Card Issuers Consider When You Apply (2024)

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Your FICO® Score can directly affect your eligibility for a new credit card, but card issuers may also consider other factors.

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Knowing what card issuers could consider takes some of the guesswork out applying for a credit card. Here are seven factors that may affect whether they approve your application:

1. Your FICO® Score and Credit Report

Most credit card issuers will request at least one of your credit reports from Equifax, Experian or TransUnion and a FICO® Score based on the report. They use a FICO Score to better understand the likelihood that an applicant will miss a credit card payment in the future. Having a higher FICO Score can help you qualify for more credit cards and lead to a lower interest rate on your card if you're approved.

2. The Issuer's Custom Credit Scores

Nine out of 10 top lenders use a FICO® Score, but many large card issuers also create and use custom scoring models.

For example, a major credit card issuer might create a custom score for its secured credit cards — cards that are generally for people who are trying to establish or rebuild their credit. And a separate custom score may be used for its premium credit cards.

The company's custom score might use an applicant's FICO® Score as an input in its custom score, along with information from their credit report and application to refine its decision-making process.

3. Your Monthly Income, Bills and Debt-to-Income Ratio

Credit card applications will ask about your household income and monthly housing bills. The card issuer can use this information, along with information about your credit cards and loans from your credit report, to estimate your monthly debt-to-income (DTI) ratio.

Federal law requires card issuers to check if applicants have enough income or assets to afford the new card's minimum payments. Some card issuers also have minimum income requirements, and they might use your income and DTI to help set your card's interest rate and credit limit.

4. Your Relationship with the Company

Credit card issuers may also consider your history and current relationship with the company.

For example, a loyal customer who has responsibly managed a credit card for years might have an easier time getting approved for a new card. However, someone with an unresolved collection for a past-due credit card might be denied automatically.

Card issuers may also consider how much credit they've extended you overall. Even if you have an excellent FICO® Score, the card issuer might deny an application if you have several credit cards from the company. But sometimes, you can get approved if you call the issuer and ask to transfer part of your credit limit from an open card to the new card.

5. Your Bank Account History

Banks and credit unions may offer credit cards alongside checking and savings accounts. If you have one of these accounts, the company might consider your banking relationship and history.

Your bank account history might show that you responsibly manage your money and pay bills that don't appear in your credit reports.

6. The Company's Policies

Many credit card issuers also have policies that can lead to an automatic denial regardless of your income and credit. For example, if you recently opened a card with the issuer, you might not be able to get a second card right away. Or, if an issuer enforces a 5/24 rule, which generally means that they won't approve a credit card application if you've opened five or more cards (from any issuer) in the last 24 months.

7. The Results of Identity and Fraud Checks

Your credit card application will also likely trigger an identity and fraud check. These checks can protect the card issuer from fraudsters and help protect you from someone trying to open a credit card in your name. If you've completed the application correctly you hopefully won't run into any trouble with these checks. But you may want to review your credit reports for errors that might cause false alarms.

Although card issuers consider many factors, having a strong FICO® Score can certainly make qualifying for credit cards easier—and can lead to getting cards with lower interest rates.

You can also get your FICO® Score from FICO for free to track your progress. No credit card required.

7 Things Credit Card Issuers Consider When You Apply (1)

Louis DeNicola

Louis DeNicola is a finance writer based in Oakland, California. He specializes in consumer credit, personal finance, and small business finance, and loves helping people find ways to save money. In addition to FICO, Louis works with a variety of financial services firms, credit bureaus, and educational websites, including LendingTree, Credit Karma, and Experian.

7 Things Credit Card Issuers Consider When You Apply (2024)

FAQs

7 Things Credit Card Issuers Consider When You Apply? ›

Income: Issuers may want to know your income to ensure you'll be able to pay your balance and to help them set an appropriate credit limit to your account. Credit score: For traditional, unsecured credit cards, issuers will typically only approve applicants with a qualifying credit score.

What should you consider when applying for a credit card? ›

Checklist of what to look out for when choosing a credit card
  • Annual Percentage Rate (APR). This is the cost of borrowing on the card, if you don't pay the whole balance off each month. ...
  • minimum repayment. ...
  • annual fee. ...
  • charges. ...
  • introductory interest rates. ...
  • loyalty points or rewards. ...
  • cash back.

What do credit card issuers look for? ›

Income: Issuers may want to know your income to ensure you'll be able to pay your balance and to help them set an appropriate credit limit to your account. Credit score: For traditional, unsecured credit cards, issuers will typically only approve applicants with a qualifying credit score.

What are 5 things credit card companies don t want you to know? ›

6 Things Credit Card Companies Don't Want You to Know
  • 1) Your “fixed rate” isn't set in stone. “Fixed rate” sounds deceptively solid. ...
  • 2) The “45 day notice” is misleading. ...
  • 3)They profit from your loss. ...
  • 4) They're (sometimes) willing to negotiate. ...
  • 5) They like to sneak in fees. ...
  • 6) They charge merchant processing fees.
May 14, 2024

What are the eight key factors of a credit card? ›

Here are eight key factors of a credit card you should search for and compare before signing up for the credit card offer.
  • Type of card. ...
  • Grace period. ...
  • The method of calculating the financial charge. ...
  • Credit Card Fees. ...
  • Cash advance features. ...
  • Credit limit. ...
  • Rewards and bonuses. ...
  • Interest rate.

What are the 8 questions you should ask when applying for a credit card? ›

Consider these key questions.
  • Is a rewards credit card a good choice? ...
  • Under what circumstances will the card issuer reduce or revoke rewards? ...
  • Does the card offer additional benefits? ...
  • Is there a foreign transaction fee? ...
  • What kind of fraud protection can you expect? ...
  • Can you manage your account on the go?

What is the most important factor when applying for a credit card? ›

Credit scores

Your credit scores can be used by credit card companies to evaluate your overall creditworthiness. They're not the only factors considered when it comes to credit card approval, but they are important.

What are 6 things a credit card companies must disclose? ›

Credit card companies must disclose APR, details about introductory offers, penalty APR, minimum payment information, fees involved, and grace period details.

What are 3 credit card mistakes to avoid? ›

10 common credit card mistakes you may be making and how to avoid them
  • Carrying a balance month-to-month. ...
  • Only making minimum payments. ...
  • Missing a payment. ...
  • Neglecting to review your billing statement. ...
  • Not knowing your APR and applicable fees. ...
  • Taking out a cash advance. ...
  • Not understanding introductory 0% APR offers.

What are the four main credit card issuers? ›

The four major credit card networks in the United States are Visa, Mastercard, American Express and Discover.

What are the 8 C's of credit? ›

The 10 Cs of Credit Assessment, and Review
  • Capacity:
  • Cash Flow:
  • Capital:
  • Collateral:
  • Characters:
  • Conditions:
  • Credit History, and Commitment:
  • Customers:
May 1, 2020

What are the key credit considerations? ›

The 5 C's of credit are character, capacity, capital, collateral and conditions. When you apply for a loan, mortgage or credit card, the lender will want to know you can pay back the money as agreed. Lenders will look at your creditworthiness, or how you've managed debt and whether you can take on more.

What are the 5 key credit criteria? ›

The five Cs of credit are character, capacity, capital, collateral, and conditions.

What not to do when applying for credit card? ›

If you authorize too many credit checks in a 6-month period it hurts your credit score. So, don't apply for too many credit cards or loans at once. This will also help you get accustomed to managing new debt before you take on another account.

What makes you a good candidate for a credit card? ›

Applicants with a lengthier credit history have a better chance of being approved. Start building credit early (but maybe not too early), and be careful when you close other cards, especially if you've had them for a long time. Your credit score will be higher if you have several open accounts in good standing.

What should your credit be to get approved for a credit card? ›

A credit score of about 700+ will likely qualify you for just about any credit card, including those with cash back rewards, lower annual percentage rates (APRs) and more. However, there are plenty of cards you can get with a score lower than this (more on that later).

What do you need to get a credit card at 18? ›

You'll need to show proof that you have a steady source of income to qualify. If you can't show a source of income, such as a job, you'll need to have a cosigner on the card or ask to be an authorized user on a friend or relative's credit card.

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