How do banks in the Philippines decide whether applicants are eligible to own a credit card or not? Why is it that some people get easy approval for their credit card application and some do not?
While it is not surprising that the investigation process done by banks is quite rigorous, sometimes even applicants who have good credit scores get rejected. So how can you boost your chances of having your own plastic and get your credit card application approved?
Here are a few tips on how to step up your game to finally get that credit card of yours—fast and easy.
Boost your credit score
Your credit score is the summary of your credit record at a given period of time. There are several factors that affect your credit score such as active loans, debt-to-income ratio, age of previous loans, and so much more. These numbers will be used to make an evaluation of your creditworthiness and in turn, affect your credit card application.
Unfortunately, in the Philippines, ordinary citizens do not have immediate access to their credit scores. While individuals may not be able to review their own credit scores, there are ways to create a good credit score such as paying bills and loans on time, improving your cash flow, and for extreme cases, having tangible assets such as real estate properties and/or vehicles.
Apply only for a credit card type that suits your lifestyle
It may be tempting to apply for a platinum or gold credit card, but you must ask yourself first if your income and expenses can shoulder the burden of a top-tier credit card. Will you need premium services any time of the day? Do you need upgraded hotel rooms or plane seats for your annual vacation overseas?
While high-level credit cards come with luxurious perks that can attract even the most frugal spender, these come at a high price such as steeper interests and bigger annual fees. Furthermore, platinum credit cards will only be a waste to the hands of people who will not be able to maximize their potential. If you just need a plastic for basic shopping needs and emergency situations, then just stick to friendlier, consumer-oriented credit cards.
Supercharge your savings account
You might be wondering about the role of a savings account, but all of your financial statements are intertwined. As part of their thorough examination of your finances, banks will also pore over your savings account to see if you have the ability to put away a portion of your income. If you already have modest savings, then you might want to try gunning for a credit card of your choice.
One trick, however, to further improve your chances with a savings account is to file an application to the bank where you have your savings. This way, they can easily find your account and increase your odds. Credit card companies need to know that they can entrust you with a card, and one way to show them how good you are with handling money is through a savings account.
Get a postpaid account, ANY postpaid account
It may be easy to apply for postpaid utilities with credit cards, but it is much easier to get your credit application approved if you have any postpaid account. Whether it is a telephone or broadband account, having a fixed monthly obligation means that you have the means to pay off your bills.
Postpaid accounts only get approved once a person has a regular source of income, which is stated by his payslip and certificate of employment. Furthermore, it also reinforces some of your information such as billing address, payment capabilities, and other information regarding your financial status. So start digging up your postpaid bills and bring them together with you when you head to your preferred bank for credit card application.
While these tips may stack the odds in your favor, doing these will not guarantee you credit card approval. Also, when applying for a credit line, make sure to only shoot the type that is within your limitations. Once you get a credit card that is way beyond your means, it spurs you to a downward spiral of financial mismanagement.