How Do I Know if My Credit is Good Enough to Apply for a Credit Card?

Managing your credit must be an important part of your financial health. Credit scores and reports can affect the types of mortgages for which you can apply, the type of employment you are qualified for and the type of apartment you can rent. Credit scores largely affect loans, though. While you cannot estimate with 100 percent accuracy whether you'll be approved for a credit card, you can find out how possible it might be.

Instructions

1

Pull a copy of your credit report at Annual Credit Report. This is a free report. You should also pay for your FICO score. This is a three-digit number between 300 and 850. Excellent scores are above 720; poor scores are below 600.

2

Review the report itself. Look for negative marks. These can be any of the following: collection accounts, judgments, charge-offs, over-limit credit cards, delinquent credit cards, bankruptcies and any liens. The most serious problems are any Public Records (such as judgments).

3

Look at your FICO score. If you have a FICO score below 600, your chances at approval are slim. You may qualify for a high-interest, high-fee account, but choosing one of these accounts is risky. If you have a score of at least 620, you have a good chance at approval--so long as you do not have any debt settlements or bankruptcies.

4

Review the payment history on your revolving accounts. Potential credit card lenders want to look at your history with revolving accounts (credit cards). If you show a poor repayment history and poor management with credit (high balances on cards), they are not likely to approve you.

5

Examine all secured debts on your credit report. Secured debts are mortgages and auto loans. If you have poor payment history on these accounts, it will be reflected in your FICO score. The credit bureaus place stiffer FICO penalties on delinquent secured accounts.

6

Look for recurring problems. If you paid off an account with another credit card and then ran up the paid off account again, many creditors likely will deny your application. Responsible lenders look for responsible borrowers.