myFICO: 7 Things Credit Card Issuers Consider When You Apply
2024年7月19日 - 1:34AM
ビジネスワイヤ(英語)
Knowing what card issuers could consider takes some of the
guesswork out applying for a credit card. Here are seven factors
that may affect whether they approve your application, from
myFICO:
For more credit education, visit myFICO’s blog at
https://www.myfico.com/credit-education/blog
1. Your FICO® Score and Credit Report
Most credit card issuers will request at least one of your
credit reports from Equifax, Experian or TransUnion and a FICO®
Score based on the report. They use a FICO Score to better
understand the likelihood that an applicant will miss a credit card
payment in the future. Having a higher FICO Score can help you
qualify for more credit cards and lead to a lower interest rate on
your card if you're approved.
2. The Issuer's Custom Credit Scores
Nine out of 10 top lenders use a FICO® Score, but many large
card issuers also create and use custom scoring models.
For example, a major credit card issuer might create a custom
score for its secured credit cards — cards that are generally for
people who are trying to establish or rebuild their credit. And a
separate custom score may be used for its premium credit cards.
The company's custom score might use an applicant's FICO® Score
as an input in its custom score, along with information from their
credit report and application to refine its decision-making
process.
3. Your Monthly Income, Bills and Debt-to-Income
Ratio
Credit card applications will ask about your household income
and monthly housing bills. The card issuer can use this
information, along with information about your credit cards and
loans from your credit report, to estimate your monthly
debt-to-income (DTI) ratio.
Federal law requires card issuers to check if applicants have
enough income or assets to afford the new card's minimum payments.
Some card issuers also have minimum income requirements, and they
might use your income and DTI to help set your card's interest rate
and credit limit.
4. Your Relationship with the Company
Credit card issuers may also consider your history and current
relationship with the company.
For example, a loyal customer who has responsibly managed a
credit card for years might have an easier time getting approved
for a new card. However, someone with an unresolved collection for
a past-due credit card might be denied automatically.
Card issuers may also consider how much credit they've extended
you overall. Even if you have an excellent FICO® Score, the card
issuer might deny an application if you have several credit cards
from the company. But sometimes, you can get approved if you call
the issuer and ask to transfer part of your credit limit from an
open card to the new card.
5. Your Bank Account History
Banks and credit unions may offer credit cards alongside
checking and savings accounts. If you have one of these accounts,
the company might consider your banking relationship and
history.
Your bank account history might show that you responsibly manage
your money and pay bills that don't appear in your credit
reports.
6. The Company's Policies
Many credit card issuers also have policies that can lead to an
automatic denial regardless of your income and credit. For example,
if you recently opened a card with the issuer, you might not be
able to get a second card right away. Or, if an issuer enforces a
5/24 rule, which generally means that they won't approve a credit
card application if you've opened five or more cards (from any
issuer) in the last 24 months.
7. The Results of Identity and Fraud Checks
Your credit card application will also likely trigger an
identity and fraud check. These checks can protect the card issuer
from fraudsters and help protect you from someone trying to open a
credit card in your name. If you've completed the application
correctly you hopefully won't run into any trouble with these
checks. But you may want to review your credit reports for errors
that might cause false alarms.
Although card issuers consider many factors, having a strong
FICO® Score can certainly make qualifying for credit cards
easier—and can lead to getting cards with lower interest rates.
About myFICO
Get your FICO® Score from the people that make the FICO Scores,
for free. Plus, free Equifax credit monitoring and a free Equifax
credit report every month. No credit card required. For more
information, visit
https://www.myfico.com/products/fico-free-plan-a
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version on businesswire.com: https://www.businesswire.com/news/home/20240718974406/en/
Elizabeth Warren ElizabethWarren@fico.com