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.
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.
