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How your Credit Rating Affects your Credit Card Application

Aug 17, 2007
When you apply for a credit card, one of the factors that come most into play in whether or not you are approved is your credit rating. That's a fact that most people know well, but if you're wondering exactly how your rating actually affects you when you apply for a credit card, read on to learn more.

1. Your credit rating may rule you out for many offers.
Right from the top, your rating could rule you out of some top credit card UK offers. Every company in the UK has a number of different offerings, each designed for a different market segment. The top offers with low APR and high rewards are generally reserved for those with higher income and excellent credit histories.

2. A high credit rating will qualify you for more card offers than a low rating.
The higher your rating, the more likely it is that you'll be approved when you apply. If you have excellent credit, have lived in the same place for more than three years, have worked for the same employer for at least two years, and have a history of handling debt responsibly, take the time to scan all the offers at comparison websites to find the one that offers you the most value.

3. Your credit rating affects the APR that you are offered.
The 'typical APR' that's listed by most card companies is the rate that they must offer to at least 2 of every three customers that they approve for that product. When you apply for a credit card, you have one chance in three of being offered a card with a higher APR than that advertised. The lower your credit rating, the greater the chance that you'll be approved at a higher APR than the typical rate.

4. You can affect your rating before you apply for a card in order to qualify for a lower APR.
If you suspect that your rating is in the middle ranges because you've missed a few payments here and there, or been late once or twice, there are ways to raise your rating BEFORE you apply for a credit card. Pay down the balance on some of your cards, or reduce the number you already have for best effect.

5. It works both ways. Your credit card application can affect your credit rating.
Every time you apply for a credit of any sort, it puts a tick against your rating. If the number of ticks is excessive, or if you apply for many products all at once, it can lower your credit rating and make it harder for you to get a good deal with a low APR when you really want it.

The best advice you'll ever get is to check your credit rating BEFORE you apply so that you can apply for those credit cards for which you are most likely to be approved. Take the time to research products so that you're sure of getting the best deal for your purposes.
About the Author
Jon Francis has been involved with finance for many years! With an in-depth knowledge of the credit card UK market help helps others get the best from a credit card.
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