What Credit Rating Scores Tell a Potential Lender

Posted by Courtney Jaden

May 14, 2008

by Courtney Jaden

Is your mailbox always stuffed with bunches of credit card offers? This happens to pretty much everyone. It’s gotten easy for most people to apply for a new card, because there are so many companies that are eager to benefit from your spending.

But offers are one thing; getting approved for a new card, on the other hand, that’s another story. Credit card companies usually have strict requirements, even if they seem to send credit card offers to just about anyone. One of the things they pay close attention to is credit rating scores.

If you don’t have good credit rating scores, you can still improve them. However, it won’t happen immediately. Like anything else, you have to work at it if you really want to improve your scores. Once you have a good credit score built up, you’ll find it easier to get approvals for your applications.

You may ask yourself, “How can I improve my credit rating scores if that is the first requirement to obtaining a credit card?” To get the ball rolling, here are three tips to follow.

The first thing you can do is pay your bills and on time. To prevent credit rating scores from dropping, and to be approved for a credit card, all of your bills need to be paid on time.

If you ever happen to pay late one month it is not like the world will come to an end. There is still hope for you to get a credit card as long as those late payments do not become a trend. When you are able to consistently pay your bills on time over several months, your credit rating scores will go up.

Canceling old credit cards may be something that you’ve been tempted to do. You may not want to do this; it seems wise, but it’s really the opposite. All the credit cards you have as part of your credit history reflects positively on your credit score. For lenders out there, a credit card shows that you have funds available to pay them if needed.

Even if you are still paying on them, keep your old credit cards. You should do this even if you don’t use them. You will have a much easier time applying for a new card if you keep paying your bills and increase your score.

Another thing to keep in mind is to never max out your credit card when you use it. Your credit score will more than likely plummet if you use up more than 50% of your limit.

There are two advantages to staying below 50%: First, you’ll be able to stay on top of your bills, and secondly, you’ll maintain a better credit score. Now that you know these tips and understand how they influence your credit rating scores, you’re in a better position to apply for a new credit card. Good luck on boosting your credit score!

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