Filling in a credit card application can be a little scary if you’re not confident you will be approved. In this video, we look at how to get approved for a credit card.
Video transcript
Hi, I’m David, and this is Credit Card Compare.
We’re looking at how to complete a successful credit card application so that you get approved.
Filling in a credit card application can be a little scary if you’re not confident you will be approved.
Thankfully, many credit card providers have made the application process as easy and seamless as possible. Most banks can process your application and give you an approval decision in 7-10 days. Some of the leading credit card providers will give you an approval decision within 60 seconds.
Ultimately, there’s no 100% foolproof way to ensure that you’ll be approved. Even if you meet all of the minimum criteria, the final decision is in the hands of the credit provider. Even Senators get knocked back. In a Senate Estimates Hearing on credit cards, Senator Xenophon revealed that he was knocked back by the NAB in 2014 for a credit card application!
According to consumer credit law, they can only approve your application if they think that it’s the fair and responsible thing to do.
When you submit your credit card application, the bank will need to:
- verify your identity,
- fully assess your financial profile and your capacity to repay the credit limit.
If they’re satisfied, you should get approved.
All up, your credit card application should only take 15 minutes to complete, and there’ll be a few follow-up steps to take after you’ve hit the submit button. You can expect a phone call from the credit card provider the same day or the next as your application progresses.
1. On the first part of your application it’s about establishing your identity
Make sure you have all your necessary documents and details ready to fill in your credit card application. It includes your:
- current address and previous addresses going back the last 3 years,
- contact information,
- driver’s licence,
- pay slips or tax returns,
- your current work details,
- a list of your main assets and other cards or loans you’ve already got
- as well as the details of any additional cardholders that you want on your account.
The main thing is that you wanna make sure that your details are accurate and verifiable. This is one of the most common reasons why applications don’t get approved.
2. Assess your financial profile (which involves looking at your credit report)
You may have noticed that credit providers set minimum credit criteria to be considered eligible, and this varies from card to card, but typically, they are going look for these 4 different things:
- They’re looking for people to be at least 18 years old,
- Be a citizen or resident of Australia (and in a limited number of cards, only being a Temporary Resident is enough),
- Meet the minimum income threshold.
Obviously, a high-end credit card will require a higher income to be eligible, whereas a more basic credit card will require less income.
In general, banks want to know what your pre-tax income is that is taxed in Australia.
- If you’re an employee, you will need at least two recent payslips to prove your income. If you’ve been in your job for less than two years, you’ll need to provide details of your previous employment.
- If you are self-employed, then they’ll ask for your accountant’s details, and they may need 2 years of tax returns.
- Generally, if you’re receiving Centrelink payments on a pension or superannuation, it is counted as income.
4. The 4th thing is that they’ll also check your credit report
Around 80% of people have never checked their credit report. It is your record of all of your credit activity, and it helps lenders to figure out your creditworthiness. In short, “If we give this card to you with, say, a $5,000 credit limit, are you going to able to responsibly manage that?”
As of 2014, Australia’s credit reporting system is ‘comprehensive,’ which means your history of compliance and instances of non-compliance are reported and considered.
Part of the credit reporting process will be looking at your repayment history, which is great if you consistently pay your credit card on time (even if it's just the minimum) but not so good if you don’t.
It’s a good idea to learn about your credit report and score before applying so that you can fix and improve it. Veda, D&B, or Experian offer free credit reports.
Here are our top tips for getting approved for your credit card application:
- Compare cards first. Check out our first time credit cards and easy approval credit cards.
- Don’t apply for multiple cards in quick succession. This will negatively affect your credit report, and from the lender’s perspective, it will not look good.
- Only apply for a card if you meet the minimum credit criteria. For example, there’s no point in applying if you don’t earn the minimum pre-tax income.
- You want to ensure that all your application details are accurate and verifiable.
Best of luck; we hope your credit card application is successful.
