Getting a credit card may seem simple: fill out a form, submit the essential documents, and wait for the card. However, small mistakes can cause delays, rejections, or even harm your credit score. Whether it is your first card or an additional one, understanding how to credit card apply and what to avoid can save you time and trouble.
Here are some common mistakes people make when applying for a credit card and how you can avoid them.
1. Not Checking Your Credit Score
Your credit score is the first factor issuers evaluate to determine your creditworthiness, so it’s necessary to have a healthy score.
- If you apply without knowing your score, your application may be declined
- A low or incorrect credit score can impact your chances of approval, also leading to higher interest rates
- Some lenders may reject your application without giving any reason
Tip: Always check your credit score before applying. Tools like the OneScore let you check your score quickly at no extra charge, helping you understand your financial health and credit card eligibility.
2. Ignoring Errors on Your Credit Report
Once you’ve checked your credit score, the next step is ensuring your credit report does not contain errors, as issuers rely heavily on accurate credit reports to approve applications. Sometimes, your credit report contains errors, such as an incorrect address, outdated accounts, or inaccurate credit limits. These mistakes can:
- Lower your credit score
- Affect your chances of approval
Tip: Check your credit report regularly. for any mistakes. Raise a dispute in case of any discrepancy and make sure errors are fixed before applying for a new credit card.
3. Submitting Multiple Applications at the Same Time
Even if you have a clean credit report, applying for multiple credit cards at the same time can affect your chances of approval. This approach can have negative consequences, including:
- Each application creates a hard inquiry on your credit report
- Multiple inquiries in a short time can lower your credit score
- Issuers think multiple applications indicate financial trouble
Tip: Wait 3 to 6 months before applying for another credit card. Focus on one at a time to maintain a healthy credit record.
4. Not Meeting the Credit Card Eligibility Criteria
Apart from credit history, you also need to meet certain eligibility criteria. This includes requirements like minimum income, age, or job status. Failing to consider these factors can often lead to rejection.
- Missing the minimum income requirement often leads to rejection
- Some cards need you to be salaried or within a certain age range
- Student or beginner cards have easier requirements but offer fewer benefits
Tip: Always check the credit card eligibility criteria before applying. If you do not qualify, consider a secured credit card, which is an excellent option for individuals new to credit.
5. Not Providing Steady Income Documentation
Approval depends not only on eligibility but also on your income. Issuers need proof of steady income to be assured of your repayment capability. Submitting weak or inconsistent income proof can ruin your chances.
- Salaried employees should provide recent salary slips and bank statements
- Self-employed applicants need to submit tax returns and business documents
- Incomplete or outdated papers lower your credibility
Tip: Keep your documents up to date and organised. If your income has recently increased, wait to provide the latest documents.
6. Providing Incomplete or Incorrect Information
Along with proper income proof, you need to ensure there are no mistakes in your application form. An erroneous or incomplete application can slow down the process or even lead to rejection:
- Typos in your name, address, or contact details can cause confusion
- Mismatched information in your documents raises concerns
- Missing documents or unclear income proof slow down verification
Tip: Take your time filling out forms and double-check everything. Keep your documents up to date and ready to submit.
7. Not Considering Your Current Credit Limits and Utilisation
Beyond the application, your current credit usage plays a significant role in determining whether your new application is approved. If you already have credit cards, ignoring your current credit limits and usage can harm your credit health.
- Using more than 30% of your credit shows you as a risky borrower
- Having many credit limits affects your debt ratio
- Applying for a new card while you owe debt can lead to rejection
Tip: Keep your credit utilisation low by paying off outstanding balances. Apply for new cards only after improving your credit.
8. Applying for Cards You Don’t Actually Need
Being aware of your credit usage is key, and equally important is getting a card that suits your lifestyle. Sometimes, chasing sign-up bonuses or rewards leads to multiple cards that doesnt meet your lifestyle, resulting in additional fees.
- Having unused credit cards can hurt your credit score
- Managing many cards can cause missed payments and penalties
Tip: Choose cards that match your spending habits. For example:
- Frequent travellers should choose cards with airline or hotel rewards
- Frequent shoppers should opt for cashback or discount cards
- If you want simplicity, one card with broad benefits works best
9. Failing to Compare Different Cards
Before you apply, comparing cards helps you avoid hidden fees and makes you pick the right card, as there are hundreds of credit cards with different benefits, fees, and interest rates.
- Some cards offer better rewards on travel or shopping
- Others have lower interest rates or simpler eligibility
- Making a comparison helps you avoid extra fees and get higher credit limits
Tip: Use online tools or apps to compare cards side by side before making your decision.
Applying for a credit card is not just about filling out a form; it is about understanding your finances, picking the right card, and submitting a clear, accurate application. Avoiding common mistakes can improve your chances of approval and help you make the most of your card.
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Other features include access to both physical and virtual cards, where the physical card is used for in-person transactions and the virtual card can be used for online purchases. Apply today to find a financial companion for your everyday expenses and big-ticket expenses.