Financial app Lista shares tips and tricks on how to get a credit card application approved.
Lista says it is crucial to recognize one’s credit score—a rating based on financial management which affects the likelihood of obtaining credit cards and other financial services.
When it comes to being denied a credit card, one significant reason might be that a credit score is too low, it says. The score includes factors such as payment history, length of credit history, types of credit used, amount owed and number of new credit applications.
The same goes for any late or missed payments for any other financial obligations one might have.
“Getting rejected for that first credit card isn’t a dead end. There are several steps you can take to improve your credit score and increase the chances of getting your credit card application approved the next time you apply,” according to Lista.
The first step is to build credit history by seeking out banks or fintech institutions that offer financial products such as small personal loans. Successfully paying off these loans can help build credit history and improve one’s credit score.
Opening a savings account at a bank can also help improve credit record. Once the savings account is active and in good standing, applying for a credit card at the same bank could improve chances of approval.
“That’s because the bank with which you opened your savings account is in the best position to verify your credit history,” it says.
Another tip is to pay bills on time or before their due dates. “To save yourself the hassle of manually paying your bills one by one, some banks can automatically debit your bill payments from your savings account,” it says.
Lista discourages multiple applications. “If a bank rejects your credit card application, should you try again with a different bank? No, you shouldn’t. Successive applications in a short span of time can cause your credit score to take a hit. It also gives banks the impression that you’re desperate for credit,” it says.
One should also be honest throughout the application process. Honesty is the best policy for a reason. Some applicants falsify records or submit fake documents such as pay slips or certificates of employment. However, banks and other financial institutions have surefire ways of determining whether those documents are indeed legitimate,” it says.
An obvious tip is to find a stable source of income, as lenders need assurance that the people they extend credit cards to are able to pay their bills on time.
“That’s why many approved applicants are those with full-time jobs. If you’re a freelancer or self-employed, an approved application may boil down to how well you can show that your business or professional practice is profitable. Prepare to collect and show a lot of documents such as business permits, income tax returns, and more,” it says.
“Apply for a credit card that fits your credit score As a newcomer to credit, you probably won’t be able to qualify for credit cards with huge rewards and long 0 percent interest terms right away. However, all is not lost. Many credit cards intended for those new-to-credit offer good rewards and might not even charge annual fees. If you opened a savings account at a bank, having good history might even pre-qualify you for approval on certain cards,” it says.
“One way to stay on top of your credit is by monitoring your credit reports. Additional data from the TransUnion Philippines credit perception study showed that 54% of Filipinos are comfortable monitoring their own transactions and expenses. To easily access your credit report and build the habit of monitoring your credit behavior, all it takes is a few clicks on Lista, the fastest-growing financial management app in the Philippines,” it says.
Through a partnership with the country’s leading credit bureau CIBI Information Inc., The Credit Information Corp., the country’s sole public credit registry and repository of credit information, has authorized Lista to access CIC credit data through CIBI as a non-accessing entity.
The partnership enables Filipinos to access their credit reports and utilize other premium features on the Lista app such as the Credit Score Trend which shows users how their credit scores have performed in the span of six months.
“In the pursuit of greater financial inclusion, our partnership with CIBI is instrumental in helping more Filipinos create and maintain good financial habits,” says Khriztina Lim, Lista co-founder.
“Through the Lista app, users can know their credit scores in just a few taps. This information is made instantly available to help users determine eligibility for credit cards and loans. They can also discover tips on how to improve their credit scores, all at a very accessible price,” she says.
One can obtain credit score on Lista for P199 per request. Users should prepare one valid ID for identity verification. A recent study by TransUnion Philippines shows that 67 percent of Filipinos show high favorability towards credit cards. Further insights indicate that 62 percent of Filipinos are likely to use credit cards in the coming year.