What Do Lenders Look for When Approving Credit Cards?

June 16th, 2010

Before you submit an online application for any kind credit card, you should spend a bit of time preparing your finances to ensure a much better chance of receiving a credit card approval.

There are plenty of tips to get approved available, but the key is learning to understand what lenders look for in a good customer.

Getting a Credit Card Approval: Tips to Get Approved

Below are some of the simpler steps you can take to help increase your chances of receiving a credit card approval first time.

Are You the Type of Customer Who Is Likely to Repay the Money You Borrow?

When you first submit your credit card application, a lender will immediately run a credit check to look at your past credit history. If you have a good credit history, showing no obvious defaulted payments or other problems, they’ll know you’re likely to be a good customer.

Can You Afford to Repay the Amount You Borrow?

Banks and lenders are quite cautious about lending money to a customer with no obvious means of paying back the amount they borrow. While it might seem a little strict to some people, the reason lenders request so much income verification is to be sure you really can afford to make your repayments on time without struggling financially.

A big part of the credit card approval system revolves around your current level of job stability and the amount you earn. If you’re in a full time job earning good money, your chances of receiving an approval are much better than if you’re only employed as a temp and your income fluctuates from week to week.

Have You Requested a Credit Limit That is Too High?

Most tips to get approved focus only on repayment capacity, but lenders actually consider carefully the credit limit you’re applying for. Imagine applying for a high credit limit that will incur very high monthly repayments. If your income isn’t high enough to cover the cost of those repayments, you could find your application for your credit card is declined. Be realistic about the credit limit you apply for.

Have You Applied For the Wrong Type of Credit Card?

While it might look cool to flash a Platinum card around in front of friends, if you don’t meet the qualifying criteria for one, your chances of receiving a credit card approval are non-existent.

Similarly, if you have a poor credit history, you might find it difficult to receive an approval for a low interest balance transfer deal.

Be sure you’re applying for the right type of credit card to suit your own personal financial situation and you’ll be far more likely to be approved.

Editors Choice: Featured Credit Card Deals

	Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Cash Advance Rate (p.a.)
Westpac 55 Day Credit Card	0% for 5 months (reverts to 19.59% )	3.99% for 6 months	$0	21.49%
Citibank Clear Platinum Card	11.99%	2.9% for 12 months	$99	21.74%