Credit Card Approval: How Does It Work?

The credit card approval process can be complex and time-consuming. What seems as if it should only take seconds involves quite a bit of computer work and behind-the-scenes calculations. Savvy consumers can help themselves along during the credit card approval process if they know the details for which lenders and their systems look. The following information contains helpful tips about the credit card approval process.

Identification Stage

The first stage in the credit card approval process is the identification stage. A new applicant needs to supply a credit card company with enough information for verification. Such information includes address information, social security number, birthdate, telephone number, and other personal information. The credit card approval system absorbs the information the consumer provides, and it checks it against computerized consumer report information.

Qualification Stage

The next step in the credit card approval process is qualification. The system looks for information on the consumer’s length of residence, term of employment, and income amount. Consumers who want to improve their chances of obtaining a credit card would want to make their credit score report as high as possible. Credit card approval software compares income and compares it with the amount of monthly rent or mortgage individuals indicate on the application. Therefore, low rent or mortgage amounts compared to high-income amounts are positives.

Credit Profile Check Stage

The only part of the credit card approval process that the consumer cannot directly control is the credit check stage. During this stage, the approval software scans credit report systems for specific scores and reports. A person who has a bad credit history with a score that is lower than 520 will not qualify for a traditional credit card. The system will deny this person immediately.

Consumers with a score of 580 to 620 are considered to have “fair” credit. The credit card approval process may temporarily freeze for a consumer with fair credit. The lender will want to have an in-person review of the consumer’s complete credit history over time. Applicants who reach this crossroads usually receive a message that the lender needs “additional information.” Full processing can take up to 30 days.

Ways to Increase Credit Card Approval

The best way to increase chances of gaining credit card approval is to pay bills on time consistently. Those who have bad credit can obtain secured credit cards or high-interest credit cards. Consumers with high-interest cards will earn lower interest rates and more credit over time.

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