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If you’re thinking of applying for a credit card, here are 10 tips to increase your chances of getting your application approved.
1. Don’t apply for too many cards at once
Every time you apply for a credit card, it dings your credit score, so if you apply for many cards at once, it doesn’t look good to lenders. It’s better to take your time to find the right card to apply for rather than waste your time applying for cards you are unlikely to get approved for. If you do want to apply for multiple cards, then spread out your requests so they are at least six months apart.
2. Know what’s in your credit reports
When you apply for a card, any errors on your credit report that haven’t been corrected could impede your approval. If you see an error, be sure to file a dispute with the credit bureau to get it fixed.
You can get your free credit report at annualcreditreport.com. While they are normally available annually, you can get them weekly through April 2022.
3. Apply for cards that fit your credit score
Some cards are only available to those with excellent credit while others are aimed at consumers with fair or average credit. Applying for the cards that match up with your credit score gives you the best chance of approval. For example, if you have a fair credit score, you might want to consider a card like Capital One QuicksilverOne Cash Rewards Credit Card, which is aimed at consumers with scores from 630 to 689.
4. Pay your bills on time
Paying your bills on time each month contributes to your credit history and can help your credit score. That includes payments for credit cards, student loans, a mortgage, rent and utilities. Consider setting up automatic payments, at least for the minimum payment due each month, to avoid accidentally missing a payment and getting hit with late-payment penalties.
5. Watch your credit utilization
Lenders look at your credit utilization rate, which is the total amount of credit you are using compared to the credit you have available. Keeping your total credit utilization rate under 30% can help your credit score. That means if you have a credit limit of $1,000, you want to avoid spending more than $300 each month.
6. Create a diverse range of credit
Having a mix of credit history — a few different kinds of cards and loans — will help your appeal as a borrower. When you consistently make timely payments across the board, it shows you can handle different kinds of credit, and you’re more likely to be deemed a reliable applicant.
7. Consider a secured card to build credit history
If you have a thin credit history or bad credit, then it can be hard to qualify for a traditional unsecured credit card. With a secured card, you’ll be asked to put down a cash deposit, and your credit line will be equal to that amount. After you make on-time payments over six months to a year, you’ll have a better chance of being approved for a traditional credit card.
With the OpenSky® Secured Visa® Credit Card, for example, you can put down a deposit as low as $200 and then that becomes your credit limit on the card.
8. Find a co-signer
If you have no credit or bad credit, getting a co-signer will increase your likelihood of being approved. This means that someone else will be responsible for your debt if you can’t make the payments. Another option is having that person add you as an authorized user on their account.
9. Build credit early
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.
10. Apply at your bank or credit union
You’ll be in a better position to win approval if you apply for a credit card at the bank or credit union where you already have a checking or savings account.