Understanding your energy usage
The process of applying for a credit card shouldn’t be stressful, but it can help a lot to know what providers are looking for.
Here we run through some of the common reasons why applications can get turned down, and some simple steps you can take to improve your chances of getting accepted.
Lenders use the electoral roll to check you are who you say you are – and that you live where you say you do.
Being registered to vote at your current address is a sign of stability. And if you’ve been at the same address for some time, that’s an ever greater sign of stability.
Get yourself registered. It’s free and easy to do – head here for more information.
At the same time, registering to vote will also boost your credit score (see below).
While a recent house move may make you look ‘less stable,’ this will improve over time. Just be sure to update your details on the electoral roll as soon as you can.
A low credit score may set the alarm bells ringing. If a provider views you as unreliable and struggling to repay debt, they may be reluctant to lend to you.
If you have a poor rating, your priority should be getting hold of your credit report.
You can then take steps to correct any errors and look at ways to improve your score.
You can check your record for free with our Credit Monitor tool. This tool offers personalised tips to help boost your rating, such as always making debt repayments on time, closing down any lines of unused credit, not using more than half of your overall credit available – and being registered on the electoral roll.
If you have a limited credit history – or no borrowing history at all – a lender won’t be able to see whether you are good at managing credit.
To generate a credit score, you will need at least one account that requires credit. This will need to be open for several months.
You might want to look at a credit builder card. This type of plastic helps you build or improve your credit rating as you make purchases and then make repayments on time – showing that you're a responsible borrower.
You can also show that you're trustworthy and reliable by making all payments on your utility bills and other outgoings on time. This will help you to build your credit file.
Some credit cards have minimum income requirements. If you don’t meet this criteria, your application is likely to be turned down as a lender may want to be sure you can keep up with your monthly payments.
First off, you should ask yourself whether it’s sensible to be applying for a credit card based on your current earnings – or whether you’re at risk of over-stretching yourself.
If you’re confident you can afford the minimum repayments each month, you may be able to find a card with a lower income requirement. But remember, taking out a credit card is not a decision to take lightly.
If you’re at all unsure, it may be worth waiting until you’re in a more stable job or earning a bigger salary.
As well as income requirements, some cards may have other criteria, such as stipulating a minimum age, or that you must be a homeowner.
Read the qualifying criteria carefully and only apply for cards which are suitable for your needs and circumstances.
If at some point in the past, you had a joint account or joint mortgage, say, with a partner, that financial association may still be showing on your credit file – even if you're no longer together.
If this is the case, a credit card provider may view your ex’s credit history when considering your application.
If they have blemishes on their file or a low score, that could harm your application.
If the financial association no longer applies, ask for a ‘notice of disassociation’ to be added to your credit report. This will ‘un-couple’ your files in the eyes of lenders. Read more here.
If a card provider sees you’ve made several applications in a short space of time, this may be seen as a red flag, as it could suggest that you’re financially overstretched.
Also bear in mind that if a hard search is carried out each time you apply, you could end up with marks all over your credit file. This could make it even more difficult to get a card in the future.
It may be worth waiting a few months before making another credit card application.
When you do want to try again, the best approach is to use an eligibility checker tool which carries out a ‘soft search’ to show you how likely you are to get accepted, without leaving any footprints on your credit report.
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