8 tips to boost your chances of getting a credit card approved

When you're applying for a fantastic travel rewards card, the last thing you want is to face rejection. With attractive sign-up bonuses, benefits, and points up for grabs, you'll want to do everything possible to secure that approval.

Continue reading to discover how to enhance your chances of approval, ensuring you can add a new credit card to your wallet.

Review your credit history and score

When evaluating your credit card application, issuers prioritize your credit history and score. Many major issuers provide free access to your credit score. For instance, Capital One offers its CreditWise program to everyone. These services also provide insights into the factors that impact your score.

If you believe your credit score is lacking, obtain a copy of your credit history from the three major credit bureaus to understand the specifics. To get your report, visit AnnualCreditReport.com, the sole source for free credit reports as authorized by federal law.

With this service, you can request one complimentary copy of your credit report each week from every credit-reporting agency.

Only apply for cards that align with your credit profile

Travel rewards cards are generally reserved for individuals with excellent (740+) or good (670-739) credit scores. Typically, the more features and benefits a card offers, the higher the credit score needed, so don’t expect to qualify for a premium card like The Platinum Card® from American Express with a credit score in the low 600s.

Lower your existing debt

I was appalled the first time I reviewed my credit report. It revealed that I had outstanding debt on all my credit cards, despite consistently paying off my statement balances in full and on time.

Later, I discovered why my credit reports indicated I was in debt: each time a credit card's monthly statement cycle ends, it generates a statement that reports the balance to the three major consumer credit bureaus. At that point, card issuers cannot tell if you'll sidestep interest charges by paying the full statement balance. Technically, my statement balances were considered outstanding debt, even though I was confident that paying them off in full before the due date would eliminate any interest charges.

Even if your statement balances are not significant, they still count as debt, which may make card issuers reluctant to approve you for additional credit. Banks are more concerned about overextending credit and the risk of default than about offering you another sign-up bonus.

Once you grasp the bank's concerns and how your statement balances are classified as outstanding debt, you can easily take steps to minimize what's reported. The first move is to pay off your largest balances before the end of your credit card statement periods. Otherwise, paying a balance after your statement closes won’t lower the amount reported to credit bureaus that month.

If you make payments before the end of your credit card statement periods, you won’t show any outstanding debt. Additionally, you’ll likely see a slight increase in your credit score as your debt-to-credit ratio improves. I make it a point to do this before applying for a new credit card, and it’s a crucial tactic when seeking a mortgage or home loan.

Reduce your credit utilization ratio

In addition to lowering your debt, it's important to keep a high credit limit. These two figures create your credit utilization ratio, which is calculated by dividing your total credit card balances by your total available credit.

While it's crucial to pay off your credit card balances in full before your monthly statement closes, it's just as vital to ensure your denominator remains high to achieve a lower utilization ratio. This ratio can account for about 30% of your FICO score, making it a significant factor in determining your credit score. Although applying for a new credit card may temporarily lower your score, it can ultimately increase your credit, thereby potentially improving your utilization ratio in the long run.

Another consideration is that canceling a credit card means relinquishing some of your available credit. This can negatively impact your ratio, so instead of canceling, think about downgrading to a no-annual-fee card or transferring that credit to another card within the same banking network.

Clear outstanding balances with the same issuer

You can boost your approval chances by reducing or eliminating any existing balances on other cards issued by the same bank. The issuer can view this type of outstanding "debt" in real time.

For instance, if you're aiming to get approved for the Chase Sapphire Reserve®, it’s advisable to pay off any balances on other Chase cards before submitting your application. In this scenario, the statement doesn’t need to close first; the bank will always have access to your current balance.

Be aware of application restrictions

Some card issuers set a limit on the maximum number of accounts for which you can be the primary cardholder. Others may restrict the number of applications you can submit within a certain timeframe, such as Chase's (theoretical) cap of one personal and one business card application every 90 days.

Include all sources of income

A frequent mistake applicants make when seeking a credit card is downplaying their income by neglecting to account for all qualifying sources.

The Credit Card Accountability Responsibility and Disclosure (CARD) Act permits you to factor in all household income you reasonably expect to access. This regulation aims to ensure that non-working spouses and domestic partners have equal opportunities for credit.

Additionally, make sure to account for other qualifying sources of income, including alimony, child support, disability benefits, investment earnings, and withdrawals from retirement accounts.

Request a reconsideration

If your application is initially rejected, don’t lose hope. You can reach out to the bank's reconsideration line and request that a representative reevaluate your application manually. Before making the call, consider reducing your existing balances, particularly on accounts associated with the bank to which you applied.

In some instances, I’ve called to advocate for myself, and the representative has approved my application without any further questions. Other times, you may need to clarify your reasons for wanting approval. For example, discuss the card’s features and benefits, but try not to specifically mention the sign-up bonus. If you didn’t initially list all your income sources, request to update your application accordingly.

If that approach doesn’t yield results, consider suggesting reallocating a portion of your current credit line with that bank. Keep in mind that the bank’s main concern is to minimize its risk in case you are unable to repay your charges. By offering to adjust your credit line, you enable the issuer to extend a new account without increasing its exposure. Additionally, you might propose closing an unused account if it would facilitate approval for the new account.

Key takeaways

While there’s no guarantee of approval for a credit card application, following these tips can enhance your chances of success. Credit cards come with a range of benefits and rewards, so increasing your likelihood of approval could lead to exciting new credit opportunities.