Credit card eligibility: everything you need to know

17th July 2018

By Kurt Wood

Having good knowledge of the market and your credit profile ensures a better approval rate and prevents damage to your credit score in the long term. Here is everything you need to know about credit card eligibility, how to check your personal information online, and how to compare the best credit card offers.

Credit card eligibility and credit ratings

The main factor potential creditors will use when assessing your application is your credit score, which is a rating that is given to you by credit reference agencies.

There are three credit reference companies in the UK. They are Equifax, Experian, and Callcredit. These agencies keep a financial profile of everyone in the country who has ever taken out credit.

Lenders pay a fee to access your information via one or more of these agencies every time you apply for credit. Based on your credit score, you could be accepted or declined for your requested borrowing amount.

But it’s not just your credit rating that can affect your application. Other factors that a lender will look at include:

Existing credit cards – if you already have credit cards to your name with maxed out limits, you could be turned down even if your credit score is good.

Recent activity – too many recent applications for loans and credit cards can affect your chances of getting approved.

Length of credit history – long-term proof that you can borrow and repay on time can be extremely beneficial to enhancing your credit entitlement.

Current loans or mortgages – having an instalment loan or a mortgage already in place can work in your favour, as this can show that your finances are robust enough for high-volume lending. But if you have high amounts of borrowing compared to your income, it could put lenders off.

Where can I check my credit rating?

With the three credit reference agencies, you can check your credit rating online.

CallCredit

You can get your CallCredit score through Noddle.co.uk (free or £30 a year for a full report) and CheckMyFile (£8.99 a month). We offer a free credit report through CallCredit.

Equifax

Equifax offers three different ways to check your credit rating. You can get a free checker with ClearScore or you can pay for the more advanced service directly from the Equifax site, costing £14.95 a month. The paid membership gives you unlimited access, regular alerts and identity protection against online fraud.

Experian

Get a free Experian account (credit score only) or a paid CreditExpert account (score and report) for £14.99 a month. You can also pay £2 as a one-off payment for a single statutory report.

How do I improve my credit score?

When checking your credit rating online, it’s important to remember that scoring systems differ between agencies. For instance, Equifax scores are from 0 to 600 whilst Experian scores range from 0 to 1000. Ultimately, they all tell the same story. The higher your score, the more likely you are to be accepted by lenders.

Here are some ways to improve your rating:

Reduce your debt – if you owe a lot of money, your credit score can be affected. Reduce your debt before applying for more credit cards and loans.

Don’t miss payments – defaulted payments can severely damage your credit rating. Set up payment reminders so you don’t forget to pay on time.

Build a credit history – having no credit history can sometimes be as bad as a poor credit history. Build up your credit over time and prove that you are responsible when borrowing money.

Register for the electoral roll – even if you don’t vote, it’s important to register on the electoral roll as this can help you get credit. Being registered helps you establish your address and get recognised by credit reference agencies.

Keep balances low – avoid maxing out any existing credit cards and keep your balances at a manageable minimum. Try to pay off your full balance each month to show that you are good at managing finances.

Another thing to note is that every credit search is recorded in your file. This means that lenders will be leaving a footprint on your credit account every time you apply for a card.

If you get declined for a credit card, do not continue to keep applying to other lenders. Multiple rejections can drop your credit score, which can take years to mend. The general rule of thumb is to wait three months before applying again.

Where can I check my eligibility for credit cards?

With credit searches having a direct impact on your score, it can be unnerving to take the first step in your application. One of the biggest questions asked today is: ‘Where can I check eligibility for credit cards before I apply?’

The best way of doing this is using an online tool, usually free to use and safe against your credit file. These online checkers will perform a credit card eligibility ‘soft search’ based on the information you provide. While you will be able to see the search on your account, lenders won’t, so your rating will not be affected.

For instance, we provide a free credit card eligibility checker that doesn’t affect your credit score.

Am I eligible for a credit card with bad credit?

Even if you have very little credit history or bad credit, you can still find a credit card. But what you must consider is that your options will be limited. Finding good credit card offers with poor credit history can be challenging. You will likely be offered very expensive interest rates compared to standard card deals.

If you have previously been declined for credit cards, it could mean that your credit rating isn’t strong enough. It may be time to look into alternative solutions, such as bad-credit credit cards (designed to help poor credit customers rebuild their rating) or secured credit cards (with a deposit system to provide for guarantees for the lender).

Some cards can help you build your credit, and using your card regularly whilst always paying the full balance every month can help to improve your credit rating over time.  

What credit cards can I get online?

Searching online is the best way of getting the best possible credit card deal for your financial needs. The key to applying successfully without damaging your chances of borrowing in the future is to do your research beforehand.

We recommend always finding out your credit score and using a credit card eligibility checker before submitting a credit card request. This can help you get a better picture of what credit cards you are eligible for before leaving footprints on your credit profile.

Once you have assessed your credit entitlement, you can then compare credit cards to find the best deals online. Comparison tools are quick and easy to use and can help you compare different offers from a number of reputable lenders.

Whether you’re looking for 0% balance transfer cards, low-APR cards, or cards with interest-free periods, there are a lot of deals that can be found by simply comparing online. Just remember to limit your applications within a three-month timeframe to avoid causing a dent in your overall credit score.

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