How to apply for a credit card and actually get approved - MoneySense

How to apply for a credit card and actually get approved

Be responsible with your credit utilization ratio


Do you remember applying for your first credit card? Most people get their first taste through student credit cards, which typically offer lower limits and are easier to qualify for. But graduating to one of the best rewards credit cards isn’t as easy as deciding which one is right for you—lenders make you meet their requirements, not the other way around.

For the best chance at being approved for a new credit card, you need to know what lenders look for and how to make yourself an attractive borrower. Before applying, here’s what you can do to improve your chances.

Know your credit score

Knowing your credit score is the easiest and most important way to improve your chances of getting approved for a credit card. Your credit score is a number between 300 and 900 and is used by lenders to assess how creditworthy you are. There are two major credit reporting agencies in Canada: Equifax and TransUnion. You can pay to learn your credit score from one of these companies. You can find out your credit score for free here.

The best credit cards require a good or excellent credit score. If yours is less than stellar, now’s the time to work on improving it. You can quickly improve your credit score by making sure to pay all of your bills on time, by paying down the balances on your existing credit cards, and reducing the credit limits on any cards you don’t use.

RELATED: Canada’s Best Credit Cards of 2017

Reduce your debt

When you apply for a credit card, the lender will look at a number factors. One of those is your credit utilization ratio, which is the ratio of debt you carry relative to your credit limits. The less debt you carry on your credit cards and lines of credit, the more attractive you’ll be to lenders. If you have several credit cards that are completely maxed out and you apply for a new card, this will be a red flag. It’s best to keep your credit utilization ratio to 30% or less to avoid any questions about your debt levels. That means if you have a credit card with a $10,000 limit, you shouldn’t regularly carry a balance higher than $3,000.

Seek out the best offer

Applying for multiple credit cards at the same time can also be a red flag to a lender because it may indicate you’re having money problems. For this reason, it’s best to do your due diligence before submitting your application. Compare the best credit cards and find one that fits your profile and unique spending habits. Then apply for one and only one.

Report your income accurately

Most credit cards have a minimum annual income requirement for individuals or households. For individuals, it can be as low as $15,000 a year to as much as $80,000 per year. While it might be tempting to stretch the truth on how much you earn to apply for a better card—avoid this temptation because some lenders require income verification in the form of a pay stub or T4. If you have income outside of your full-time job, you can include it and you may need your tax return to prove it.

MORE: The wrong way to pay off debt

Be realistic

It can take years to build up your credit profile to the point where you can apply for (and be approved) for the top-tier credit cards. Everyone needs to start somewhere and the easiest way to improve your credit-worthiness is to get started. If you have poor credit (or no credit), apply for a secured credit card and pay it off every single month and be sure to never carry a balance. If you can’t make the payments, stop using the credit card immediately. Make all of your bill payments on time and pay off your debts. Do a side hustle to improve your income to meet those minimum income cut-offs and eventually you’ll able to apply and secure approval for the best credit cards on the market. is a website that compares mortgage rates, credit cards, high-interest savings accounts, chequing accounts, and insurance with the goal to empower Canadians to search smarter and save money.

How to apply for a credit card5