How you might get approved for a credit card

If you’re thinking of getting a new credit card, you might wonder exactly what it takes to get approved.

There’s no way to know for certain whether your credit card application will be approved. But there are things you can do before you apply to help your chances.

What you’ll learn:

• Using credit responsibly and practicing good habits are important before and after you apply for a credit card.

• Lowering your debt-to-income (DTI) ratio could help show lenders you’re able to manage monthly payments.

• Checking whether you’re pre-approved could help you see what credit cards you may be eligible for without hurting your credit scores. 

• If you’re building credit, a secured card might be easier to get approved for.

Whether you’re applying for your first card or your next card, credit scores are a key part of how credit card issuers make approval decisions. People can have multiple credit scores. 

The Consumer Financial Protection Bureau (CFPB) says credit scores are typically calculated based on similar factors, including payment history, account history and how you’ve used credit. Here are five tips related to those credit-scoring factors that could help you improve your chances of being approved for a credit card.

Using credit responsibly over time is the best way to improve your credit scores. A big part of that is avoiding late credit card payments because your payment history is the biggest factor in determining credit scores.

Here are some other tips for using credit responsibly. 

• Pay off existing account balances. Paying more than the minimum amount due whenever possible might help you lower your balances faster. This could also mean paying less in interest. And it may help lower your debt-to-income (DTI) ratio.

• Stay below your credit limit. The CFPB recommends keeping your credit utilization ratio below 30% across all your revolving credit accounts.

Applying for a new credit card typically triggers a hard inquiry, which can affect your credit. One hard inquiry will typically only lower your credit score by a few points, according to FICO. But multiple hard inquiries in a short time period can have a more significant effect.

Keeping an eye on your credit gives you an idea of where your credit stands. You can also make sure there are no errors on your credit reports. Mistakes on your credit reports could negatively impact your credit scores and your creditworthiness.

Thankfully, there are ways to stay on top of this information.

• CreditWise from Capital One lets you access your credit report and credit score anytime without affecting your credit scores. CreditWise is free and available to everyone—not just Capital One cardholders.

• You can also get free copies of your credit reports from AnnualCreditReport.com.

Your DTI ratio is a snapshot of your income compared to your monthly bills and other debts. According to the CFPB, it’s “one way lenders measure your ability to manage the monthly payments to repay the money you plan to borrow.” 

The agency says you can find your DTI ratio by dividing monthly debt payments by monthly gross income.

Seeing whether you’re pre-approved can help you compare credit card offers to find the right fit. 

With Capital One pre-approval, you can see which cards you might be eligible for by answering a few simple questions. It won’t hurt your credit scores. And if you’re pre-approved for a Capital One credit card, you accept your offer without filling out a separate application.

There are no shortcuts to building credit. It takes time and responsible financial behavior. Even if now isn’t the right time to apply for a credit card, there are other ways to build credit. 

• Become an authorized user. Having a trusted family member or loved one add you as an authorized user to their credit card account is one way to build credit—as long as the card is used responsibly and reported to the credit bureaus. But keep in mind if the authorized user or account holder doesn’t use the card responsibly, it could hurt both people’s credit. 

• Apply for a credit-builder loan. A credit-builder loan is a type of installment loan where a lender deposits money into a certificate of deposit or savings account. The borrower typically gets the money back after they’ve repaid the loan. A credit-builder loan offers a chance to establish a positive payment history, which can help build good credit and improve the chances of future approval. 

• Report alternative data. Data that isn’t typically included in credit reports is called alternative data. This can include things like rent, utility and cellphone payments. You may be able to self-report alternative data to credit bureaus using a third-party service. If you keep up with your bills and have alternative data reported, it may help improve your scores.

Check out these frequently asked questions about how to get approved for a credit card.

It can be exciting to get a new credit card. But before you submit your application, there are some things you could do that might help you get approved, like monitoring your credit reports, making sure you understand responsible credit use, paying bills on time and keeping your credit utilization ratio low. 

If you’re new to credit or searching for your next credit card, Capital One can help. 

• See if you’re pre-approved for credit cards without harming your credit scores. 

• If you’re looking to build your credit with responsible use, explore cards for people with fair credit. 

• Earn unlimited 1.5% cash back on every purchase, every day, with a cash back rewards card. 

• Monitor your credit report and score with CreditWise. It’s free for everyone, and using it won’t hurt your credit.