Compare credit cards suitable for people with a good credit rating, excellent credit rating or no history of bad credit.
As part of the credit criteria for approval many cards require new cardholders to have a good credit rating or at least have no history of bad credit. The more high-end the credit card, the better your credit rating will need to be.
The record of all of your credit activity (credit cards, loans, utility bills) is compiled together into a credit report which indicates your creditworthiness – the better you are at handling credit, the higher you score. It helps credit card lenders to responsibly approve applications.
As of 2014 Australia’s credit reporting system is a ‘comprehensive’ system which means your history of compliance and non-compliance are reported and brought into consideration. Part of the credit reporting process will be to look at your repayment history, which is great if you consistently pay your credit card on time but not so good if you don’t make payments on time.
You can get your credit report for free from the credit reporting agencies: Veda, Dun & Bradstreet or Experian. The free copy of your report typically does not give you a credit score or indication of your credit rating and it takes several days. For full and immediate access to your credit report involves a cost.
Two main parts of the credit card approval process is verifying your identity and fully assessing your financial profile which involves looking at your credit report/score. Your capacity to repay the credit limit of your new card is also taken into consideration.
Generally, if you have a good credit score then you should be okay. However, scenarios arise where people with good credit scores can have credit applications declined. For example, banks can see how much credit you’ve got open with other banks so if approving your application would mean you would struggle to repay your new credit limit then you may be declined.
You can boost your credit score by doing of different things. A few basic tips that will help include have a credit card, pay if off on time and don’t max it out. Don’t apply for multiple credit cards on a trial basis. Demonstrate stability by not changing jobs or residential address too often. Show discipline by successfully manage different types of credit contracts (electric bills and mobile phone plans count). There’s much more that can be said about this which you can find on our blog.
No, unfortunately this is not an option for credit card holders in Australia. Becoming an additional card holder on someone else’s credit card will not any bearing on your credit report. Only the primary card holder interacts with the credit reporting system.
Typically the answer is no. However, this is another area of potential innovation for new credit card offers – so watch out.