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How to Apply for a Credit Card

Applying for a credit card is a very simple process these days. You can fill out an online application with your details, click submit, and often you will get an approval answer within minutes. But the real work happens ahead of applying.

Why? Well, there are a lot of cards to chose from, and you want to pick the card that will be the best fit for you. So what should you consider?

Before you apply for a credit card, do some self-evaluation

Before you start looking for a credit card, first start with the basics. This list provides the steps to take; read on for more details and resources for each step:

  1. Review your credit report from Experian, Equifax, and TransUnion: You can get your 3-bureau credit report here or start with your free credit report from Experian.
  2. Get a least one of your credit scores: You can get your FICO score from Experian.
  3. Evaluate your credit card needs: Learn about the types of credit cards that are offered and decide what’s best for you.
  4. Look for credit card options: Experian’s online tool is designed to match you with cards that are the best fit for you.
  5. Apply: Many card companies will let you apply online.

Review your credit report

Your credit report is basically your report card on how you are managing your credit. It is an accounting of all your credit accounts in one place and how you are paying on those accounts. Your banks, credit card companies and other financial institutions report your payment status to the credit reporting agencies—Experian, Equifax and TransUnion—on a monthly basis.

Your credit reports at Experian, Equifax and TransUnion may be slightly different, which is why it is important to look at all three.  

Where to get your credit report

You can get your credit report from many sources, including Experian. Get your free credit report from Experian, and you can get your <FICO® Score, too. You can also get one free credit report every 12 months from Experian, Equifax, and TransUnion at AnnualCreditReport.com.

What to look for on your credit report

You are the Chief Financial Officer of your credit life. You know best what accounts and other information should, or should not, be on your credit report.

It’s important to review your credit reports before you open new credit in case there is anything that needs to be cleared up since negative information in your credit report can drop your credit scores, and you want your credit scores to be the best they can be before applying for a credit card.

If you see incorrect information on one of your credit report, initiate a dispute at that credit reporting agency.

Get your credit scores

Credit scores are available from many sources—the credit reporting companies, many banking and financial services companies and online personal finance sites. You can get a free FICO Score from Experian.

The first thing to keep in mind when you are looking at your credit score? There are literally hundreds of different credit scores, and you typically will not know which credit score your lender, bank or credit card company is going to use to evaluate your credit. So don’t get too hung up on which credit score to get, and focus instead on getting it from a source you trust than using that score as a directional guide. (See: What are the Different Credit Scoring Ranges?)

When you get your score, pay close attention to the score factors that you will receive along with your credit score. These factors will tell you the reasons—either positive or negative—that factored into the calculation of your credit score.

If your credit scores are lower than you would like them to be, take a closer look at the negative score factors. Is there something you can do to try to raise your score before you apply for a credit card? Perhaps your credit utilization is too high. You may be able to raise your credit score by paying off some debt.

What score will you need to get approved for a credit card?

The banks and credit card companies may have different approval criteria, but here is some general guidance.

Type of Credit Card FICO® Score Range Credit Tier
Rewards cards, cash back cards 800 and higher Exceptional
Cards with average APR, some rewards, and other perks 740-799 Very Good
Cards for those with bad credit. Retail store cards are an option. 670-739 Good
Cards for those with bad credit. Typically no rewards, high APR. Secured cards also an option. 580-669 Fair
Secured card is likely the best option 579 and lower Poor

Shop for a credit card

Now that you have established what your credit standing is, it’s time to start looking at credit cards. Warning: Don’t get overwhelmed. There are thousands of credit card offers to choose from. To help sort through the clutter, use the list below to help you determine what type of credit card is going to work best for you. (See also: What Type of Credit Card is Best For You?)

Why do you want a credit card?

  • What purchases are you planning on making?
  • Will you pay off the statement balance each month or carry a balance?
  • Are you looking for perks, such as cash back or rewards points?
  • Do you need to consolidate credit card debt by transferring balances on several cards to one?
  • Do you have low credit scores?

For example, if you are planning on making a large purchase and will need to carry a balance for a length of time, a primary goal should be getting a credit card with a low annual percentage rate (APR). If you want to travel, choose a reward card. Keep in mind that rewards or cash back cards typically require a higher credit score to qualify.

Look at lots of options for credit cards – there are so many available. Don’t apply for the first credit card offer you see. Instead, use credit card comparison tools and review sites to view look at the card details and make some comparisons to find the card with the best terms for you and how you will use your card, as well as what cards you are more likely to be approved for.

Applying for credit cards

Credit card applications are not too intimidating. You will be required to provide your legal name, birth date, address, Social Security number (SSN) and annual income. Make sure to list all your sources of income that you include on your tax return since lenders will look at your debt-to-income ratio in their approval decision.

Can you still apply for a credit card if you don’t have a Social Security number? In most situations, the answer is yes. You can use an Individual Taxpayer Identification Number (ITIN), which is very similar to a nine-digit SSN, and is used for federal tax reporting purposes. An ITIN is available to:

  • Foreign nationals who don’t qualify for a Social Security number but do file a federal tax return.
  • Non-resident and resident aliens who file U.S. tax returns.
  • Spouses and dependents of resident aliens or nonresident alien visa holders.

Will applying for credit affect my credit scores?

Yes, applying for a credit card will affect your credit scores. Once you hit “apply”, an inquiry will be added to your credit report. If you only apply for one card, it’s often a very small impact but multiple inquiries can cause a bigger credit score hit.

Another reminder of the importance of applying for a card that meets your needs and that you are likely to be approved for. (See also: How Inquiries Impact Your Credit Score)

How long does it take to get a credit card?

Approvals for credit cards can happen within minutes for online applications; however, sometimes the card issuer may need to manually review your application, which can take longer. Once you are approved, the card issuer typically delivers the card in 7-10 business days.

Whether you want your first credit card or want to add a credit card that gets rewards or other perks, impulse applying is usually not the best strategy. Put in a little time up front so you’re applying for a card that you can get, and gets you what you need.

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