Deciding on buying a credit card is an individual’s choice, but whether you are eligible or not, it depends on the banks or the financial institutions. It may so happen that banks may reject the credit card application for several reasons which are not disclosed. For ensuring that the next application does not get rejected, there are several prerequisites the individual or the applicant should ensure.
- Detailed analysis of the credit report:
If the credit card application is rejected, the first thing an individual needs to do is access his credit report. The credit reports are easily accessible and can be analyzed without any hassles. 750 is the minimum credit score that any individual should have, if it is less than 750 then he needs to work on his score by paying all the outstanding debts, don’t delay payments. Apart from rectifying the mistakes, you should also check for any kind of discrepancies, if you find any then contact the bureau.
- Build your credit score:
Good credit behavior helps in improving the credit score. It includes paying your bills on time, no delay in payments, paying off outstanding amount, no delay in paying EMIs, having a proper balance between secured and unsecured loans. Track your credit score regularly to know where are you going wrong and rectify the same there and then.
- Apply online for the right match:
One should buy the credit card from the right lender. Banks have different criteria to provide the credit card, and thus, not all the customers will be able to fulfill the eligibility criteria. All the credit card applications are recorded in the credit report, and more applications getting rejected can affect the credit score of the individual. Individuals should use online lending sites so that they know which service provider matches his requirements.
- Get a secured credit card:
If there is an urgent requirement of the credit card, then people can always go for a secured credit card. These credit cards are issued against the fixed deposits with the respective bank. A secured credit card is issued when the consumer has a low credit score. A secured credit card does not require much documentation, as well. The credit limit for such cards is a certain percentage of the principal amount.
- Don’t apply for too many credit cards at once:
As mentioned earlier, the credit score is affected when the consumer applies for a chunk of credit card at several banks. Thus he should apply wisely for the credit card.
- Know what all constitutes your credit score:
Consumers should analyze the credit report, and at the same time, he/she should also know what constitutes a credit report. The components in the report will help the consumer to make faster and informed decisions.
- Watch your credit to limit ratio:
The ratio should be 30% debt and 70% available credit. Thus, if the limit of the credit card is INR 10000, then the available credit should be INR 7000, and the utilized credit limit should be 3000.
- Create a diverse range of credit in the credit report:
If there is a mix of types of loans, the credit score increases and makes the credit history reliable. Along with the diverse range of credits, the consumers should also make timely payments to increase the credit score.
- Check the eligibility requirements:
There are a set of requirements the individual needs to fulfill during the application of the credit card. Some of the requirements are:
- Age: Cardholders should be minimum 18-year-old
- Residential status: The applicant should be a permanent Indian resident
- Credit history: Credit history should be reliable and consistent.
- Credit rating scale:
- Minimum: 700-750
- Above 750: Good