Shopping a new credit card is like buying a new car, and the effort involved is worth the perks you get. The deals you get on a credit card can allow you reap benefits in the years ahead. However, before you jump in to apply for a credit card, there are some important factors to consider in addition to reading reviews of credit cards.
1. Reviewing your credit report for mistakes before applying for new credit card:
The first thing to do before applying for a new credit card is reviewing your credit report for mistakes. Often times it happens that technical mistakes in our credit reports affect our credit scores. If you find a mistake in your credit report, you may want to dispute it and get it corrected from the relevant authorities.
2. Checking you credit standing:
The second important thing to do is checking your credit scores to see where you stand when it comes to getting credit. This will keep you from applying for credit cards you’re likely to get rejected for. Remember, a majority issuers don’t publicize their minimum credit score for credit card eligibility, yet they may mention whom they are targeting with a specific credit card. Some would say their credit cards are for customers with excellent credit while others would target customers with good, poor or fair credits.
3. Age of credit history and inquiries:
Age and inquiries are important factors to look for in your credit report. If you get A on both factors, it means that you have no problem applying for a new credit card. However, if you get B or letters below B, you need to be more careful when applying for a new credit card.
Remember, evaluation of your new credit accounts for 10 percent of your credit score. If you make many inquiries about credit or credit cards, your score can potentially go down. You might be looking to get the best deal when it comes to approving a card you want to use for shopping. It is wise to think before filing bulk applications for credits or credit cards.
4. Consider your payment behavior before applying for new credit card
On time payments make up 35 percent of your credit score. Never miss to make all your payments before the due dates, not even by an hour. For example, when you miss a payment deadline by two hours, you would go from paying zero interest to paying 30 percent interest overnight. Not only this, your 35 percent credit score would also get a dent.
5. Cancelling your other credit cards
Never cancel your other credit cards before applying for a new one. It accounts for 15 percent of your credit score and cancelling your other cards can shorten the length of your credit history on your credit report. Additionally, it could decrease your credit availability and increase your debt use ratio.