HOW TO: Make Sure You’ll Be Approved for a Credit Card

Lately, I’ve been thinking of getting a new credit card — specifically the SimplyCash Business Card from American Express, for its kick-ass 5% cash-back on gas and automatic cash-back credit to statement (anyone can apply for a business card).

“But Cap, you have a gazillion credit cards, why do you need more?”

That’s none of your business!!

Okay… okay. I’m sorry, I shouldn’t have yelled. Its the stress at work, you know? Look, listen — I’m sorry. How about we go out for dinner next Tuesday night? That’s right. Just the two of us.

…

The problem with applying for a credit card is that many times, you won’t know whether you’ll be approved or denied credit. Rejection isn’t fun, but to add insult to injury, you’re not only denied credit, your credit score will take a few dings due to the hard inquiry imposed on your credit history when you apply for the credit card.

Thankfully with the help of other credit-rejection-fearing Internet denizens, there are resources you can access on the web that allows you to see if your credit score and history can qualify you for the credit card in question.

Step One: Know Your Credit Score and History

If you know your real FICO credit score, credit history, and you’re positive that it hasn’t changed recently, you can skip this step. If not, head over to myFICO.com and buy all three of your FICO score. Use this myFICO promotional code to get a 20% discount on your purchase.

Unfortunately purchasing your FICO score can get a bit pricey, as even with the discount, all three FICO scores will cost you about $38. An alternative is if you know your recent credit history well, you can try the free FICO score estimator. This will give you a ballpark ranges of where your scores may be at. Remember that you can always get your credit reports for free at AnnualCreditReport to help you answer the FICO score estimator’s questions.

Step Two: Check Credit Pulls Databases

When you apply for a credit card, the issuer pulls one (or more) of your credit report to help determine your credit worthiness. Knowing which credit reporting agency the card issuer in question uses will help you narrow down the credit card you should or shouldn’t apply for.

For example, if you have a delinquency on your Experian credit report, but not your TransUnion credit report, you should avoid credit card issuers that pulls Experian, and try to apply for card issuers that pulls TransUnion.

Here’s two credit pulls database:

• Credit Pulls Database from Creditboards.com (requires registration and login)
• Who Gave Me Credit (has slightly less data and may not be as accurate)

By using the credit pulls database from Creditboards, you can search for the credit card issuer you’re interested in applying for, and see a result of approved or denied credit profiles. Here’s a snapshot to give you an idea:

click to enlarge

As you can see from the picture above, most of the credit pulls for the American Express SimplyCash card was on Experian, with a few on Equifax. Most approved scores are in the 700+ ranges, and those with lower scores generally got a lower credit limit upon approval.

Whenever a credit card company denies you credit, they are required by law to state the reasons for the denial of credit. You’ll also often see these reasons noted in the comment field from the credit pulls search results.

Knowing these types of information can help you in the decision process of whether or not if you should attempt to apply for a certain card. If you see a credit pull result with many higher credit scores than yours getting denied credit, or a large number of seemingly random rejection, you may want to think twice before you apply for the credit card in question.

Step Three: Apply and Rejoice at Approval or Rage at Rejection

Now that you know where your credit is being pulled from, and have confirmed that your score and profile is indeed much better than others on the listed result, should you apply immediately and expect instant approval?

Not quite.

Although these credit pull database can certainly help narrow down your chances, at the end, credit approval goes beyond credit scores and income level. Your past history, the mix of your credit profile, your usage pattern, your utilization ratio and many other factors all comes into play. No one can know for sure what type of criteria a certain issuer may have for certain cards.

What these databases can do, however, is to supplement you with more information, so you can go from “I have no idea if I’ll get approved” to “I think I’ll get approved… maybe if the stars aligned favorably tonight.”

top photo credit: orphanjones