Many people have questions when they apply for a - which is the best for me? How do they decide to give me a credit card? Why do they need to know all these things about me? What does it mean to be pre-approved? What could make the card company decide not to give me a credit card?
It's not all that mysterious a process. Companies make their decisions based on your credit score, which is derived from your credit report and other information that they may have about you. Your credit record is maintained by reporting bureaus - the Big Three are Equifax, Experian and CallCredit. Each maintains a separate credit history, and as a general rule, they don't share information with each other. Your credit file may contain may details like:
-People on the electoral register at your address
-Details of late payments or defaults on any loans
-CCJs and bankruptcy orders against you
-All your applications for credit
-Other people who share your address
The credit reference agency does no more than supply the information on your credit history. When you apply for a credit card, the company that will issue that card takes your credit report and feeds the information in it into a set of algorithms - mathematical equations - that compare your information with the information about a fictitious 'ideal customer'. That customer has certain traits - a particular wage, a certain number of credit cards, a particular marital status, own a home or rent one, be living there for a certain number of years. The closer your own traits are to that ideal, the higher your credit rating or score will be. The higher your credit rating, the more companies would be pleased to have you as a customer.
Before you apply, it's to your benefit to shop
Additional
Resources
Top Credit Card Mistakes
By Sandra Lovelace
When you’re dealing with credit cards, you’re playing with fire. Unfortunately, there are plenty of people out there who don’t realise that, and make all sorts of dangerous mistakes with their credit Read more...
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Using A Business Credit Card For Your Business Credit Needs
By Anthony
There are certain currencies, commodities and necessities, which any entrepreneurial and business endeavor, can simply NOT do without and that is...CREDIT! In this day and age, our businesses have to Read more...
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