Recently unemployed people are facing a serious problem because of a loss of income, which has forced them to rely more on using credit cards to afford their expenses. However, they would also find it hard to get approved for one as lenders have tightened their criteria for applicants amidst deferred payments.
This doesn’t mean that you can’t get a new credit card at this time, though. You can improve your chances of being approved by staying on top of the following.
Payment History
One thing that’ll make you an appealing applicant in the eyes of credit issuers is excellent payment history. Make sure that you’ve made and continue to make your payment on time, if not earlier than the deadline.
This habit applies to other expenses such as payments for utility, mortgage, and personal loans. Missing a payment can knock off up to 90 points off of your FICO score.
Lowering Debt
Next, you should tackle the debts you currently have. Paying these would help your chances of getting a new credit card as owing money is another factor that affects your FICO score.
Remember that this score can determine whether or not you qualify for the kind of credit card you’re applying for.
To better balance your debt in the context of credit limits, make sure your credit utilization rate doesn’t exceed 30%. This means keeping debt to just $3,000 and below per $10,000 in total credit limits.
Old Accounts
Closing old cards with zero balances may seem like an excellent way to trim your credit lines, but it can actually hurt your chances of getting a new card. Keep your old line open and simply keep your cards together in a drawer or another safe place.
Just be careful of cards with an annual fee. Make sure that you contact your issuer to see if you can downgrade that card to avoid paying the fee.
Source of Income
G-Stock Studio/Shutterstock — Consider getting a work from home job to keep you employed through the pandemic
In the end though, your best chance of being approved may rely on whether or not you find another job or source of income. Applicants who were recently laid off from work will find it more difficult to get approved.
Meanwhile, being employed can help you prove to credit card issuers that you can repay your balances.