When you apply for new credit card, one of the prime determining factors for credit cards availability to you is your credit score. A higher credit score will always have a high impact on the success of your application. Knowing the implications of it will give you more informed financial choices.
Apply for New Credit Card – Credit Score and Its Impact
A credit score represents how creditworthy you are; consequently, it is linked with lender decisions. To formulate your financial strategy, understand its impact on your getting credit cards approved.
What is a credit score?
A credit score is of a value between 300 and 900 and constitutes a reflection of your credit history, the financial management behavior of the individual. The higher the score better off is the management of credit. Conversely, the lower the score points of the credit, the more probable the risk factor to any lender.
Fun fact: Your payment history accounts for about 30% of your credit score. Paying on time can really make a huge difference to your credit score.
Credit scores do impact approval or is it a myth?
When you apply for a new credit card, the lenders need to make sure that you are good enough to repay the loan, and on time. Credit scores are criteria through which lenders evaluate the risk of lending cash. The higher your score, the better your chances of being approved and getting a better interest rate and rewards.
The general ranges of credit scores
- Excellent: 750 +, High Chances for Obtaining Premium Cards
- Good: 700-749, Generally Eligible for Most Credit Cards
- Fair: 650-699, May be Approved for Basic Cards with Higher Fees.
- Poor (649 or less): They are usually refused credit or are confined to credit cards with security.
Meet Raj: A Credit Score Lesson Raj was a resident of Kolkata, and credit rejection had humiliated him. He became a wiser businessman when his application was rejected. He started to improve his credit score by making all his bill payments on time and reducing his debt within a few months. His improved score provided the good result of approvals for good credit cards.
Conclusion
Monitor your credit score Knowing how your credit score plays a role in credit card approval can help you make better financial decisions. You will be able to open up for yourself better financial opportunities when you check your score and work hard to improve it. Take right steps to keep your credit score and credibility intact which impacts not only new credit cards, but also all future loans you might be looking for.
