In essence, it would seem that getting a credit card is easy. After all, credit card company representatives are out and about on the streets and in shopping malls signing up new customers all the time. However, filling out the form is only the first step, and your credit score will be used to determine if you are actually wanted as a customer. So, what credit score is actually needed to get a credit card?
Credit scores in Australia range from 0 to 1200, with average to good credit scores in the range from 510-725, according to getcreditscore.com.au. Credit card providers take your score into consideration when approving a card, and not all credit cards are the same. In theory you could be confident that your average credit score of 665 will hold you in good stead for obtaining a new credit card, but your application will be rejected if the bank requires a score of 670 or more.
The higher your credit score, the more likelihood of credit card acceptance. A high credit score will grant you the opportunity to choose just about any credit card. A slightly lower score will still leave you with plenty of options. But as we get into the average credit score realm, the chances of rejection increase accordingly.
It’s important firstly to know your credit score. Then you can make enquiries regarding your choice of credit cards from various lenders and obtain one that your credit score matches. Otherwise, the tendency to continue applying for credit cards that are beyond your reach will lead to additional blemishes on your credit score.
A high credit score is no guarantee
Even a good credit score is no guarantee of credit card approval, much to the surprise of some applicants. A single previous late payment, or the burden of too much debt in general can limit the credit card application power of anyone, regardless of credit score. Exclusive ‘platinum-style’ credit cards are also difficult to obtain unless you have a long period of good credit history that possibly includes a mortgage, previous credit cards, personal loans, and an overall unblemished history.
In most cases, if your credit score is 700 or above, and you have a clean credit history record for at least a few years, the option of the majority of credit cards will be open to you. Your chances can still be hindered in cases where you already hold many credit card accounts or are stretched financially with other obligations.
Investigate credit card options
Average credit in the 600-700 range isn’t anything to be ashamed of, and is usually only the result of a missed payment or two. A lower credit score is also the norm for a person who has recently commenced using credit. On the downside, there is every possibility that your credit card application will be rejected until your score gets higher. If you are in this group it’s all the more important to investigate your chances of approval before applying, and start by applying only for those cards which meet your credit score range.
If your credit score is below 600, the chances of obtaining a credit card are further diminished, but not impossible. People in this category may have missed payments, had a mortgage foreclosure or been subject to collection agency proceedings. There may still be opportunities to apply for a secured credit card requiring a security deposit, or a debit card using your own money that doubles as your credit card limit. One function of this type of card is to begin rebuilding a good credit history rather than spending money you don’t really have.
Some reasons for credit card rejection:
- Recent late payment or negative finances
- Prohibitive amounts of ongoing debt or high credit balances
- A short credit history
- Too much readily available credit
Sometimes a credit card will be refused due to too much revolving debt associated with other cards in your possession. You may be paying your cards off on time every month, but the overall amount of repayments could mean you are closer to the tipping point of financial hardship. A large outstanding balance resulting from a new purchase or expensive