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Just like in exam, you need to make preparations before applying for a credit card. If your credit history is not at all good, then you'll have to make double effort to get a card. However, there are some activities that can ruin your chances of obtaining a new credit card.

When you really wish to get a new credit card, you'll have to analyze your credit report to make sure your financial health is in a very good condition.

Keep it in mind that you can't afford to make a single wrong financial move. This will just ruin your chances of obtaining a new credit card. Read along the article to know about the 5 activities that can compel creditors throw away your credit card application.

1. Be too casual about your credit score and allow it to drop

The first thing that a creditor will check is your credit score. He will make the final decision based upon your current score. There are hardly any creditors who will agree to give you a credit card with bad score. If you have a very low score, then the creditor may just decide to scrap your application.

Various creditors have different cut off points. You won't be able to know about the cut off point from beforehand. The reason is creditors normally don't reveal things to the consumers. It is best to apply for a credit card only when your credit score is more than 650.

2. Switching from one job to another frequently

You can only pay the credit card bills with a stable income. If your income is not stable, then there is a great probability that you’ll miss payments. Creditors may raise several valid questions about your income stability if you happen to frequently change your jobs.

Usually, your employment record won't make a significant effect on your credit card application. Most creditors process applications electronically on the basis of your credit score. However, in case of loans, your employment history might be verified. In such situations, frequent job changes within a short span of time may trigger a red signal to the lender.

3. Becoming a co-signer for anyone who is financially unstable

You take the responsibility of a person by agreeing to become the co-signer for a loan. Co-signing comes with a big responsibility. If the person fails to make payments to the bank, you'll pay the money.

If the person for whom you co-sign on a loan is good at handling finances, then it is very well. However, a person normally needs a co-signer when he has a very bad credit score. A person has a bad credit score only when he is not good with finances. So, chances are high that this person won't be able to handle the loan/credit very well. If he starts missing payments, then your credit score will start to drop. You may not have the perfect credit score anymore. You may know about this after 3 months are already over.

4. Going over-board and crossing the credit-utilization ratio

Credit utilization ratio contributes to around 30 percent of your score. If your credit utilization ratio is very high, then creditors will consider you as a risky consumer.

Try to stay within your credit limit. The less your credit utilization ratio, the better for your credit score. If your credit card has a maximum limit of around $10,000, and you've a balance of around $3000, then your credit utilization ratio is 30 percent. This is a good ratio. If your credit utilization ratio is well above 50 percent, then your score will drop by several points.

5. Refraining from borrowing anything whatsoever

You can't have a long credit history without using your credit cards. If you don't use your credit cards, then you can't have a payment history. The creditors check your payment history to decipher your credit worthiness. If you avoid borrowing, then creditors won't be able to get any information. As such, it won't be possible for the creditors to make a decision.

If you really don't want to borrow on credit cards, then make sure you pay your rents, mortgages, utility bills, etc. regularly. This will help you develop your payment history too.

With proper help you can
  • Lower your monthly payments
  • Reduce credit card interest rates
  • Waive late fees
  • Reduce collection calls
  • Avoid bankruptcy
  • Have only one monthly payment
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