Navigating Credit Card Approval amid a Recession
Reduced business activity and employee layoffs are causing struggles in debt settlement and the reasons credit is getting tighter.
Banks are experiencing more non-performing loans than ever and aren’t willing to give out more debt to unstable borrowers.
That means you must break a sweat to land a credit card amid the Coronavirus recession. Credit caps on existing cards have also gone down significantly.
“Lending institutions are tightening underwriting procedures by reducing limits and boosting credit score standards to avoid a wave of defaults and losses,” explained John Ulzheimer, a credit specialist.
Still, you can follow these tips to boost up your credit score.
- Fix your FICO score
A credit pull has always been a pain the neck, and the current recession doubles the drama.
Credit Score is priority number one for every lender. Anything 690 and above will win your credit even during difficult economic times.
Work on building credit by making timely per-month payments; use credit sparingly, spend 30% or so, and keep all other cards live to strengthen your credit history.
- Consider different cards
The best credit card offers, such as general and cashback cards, require good credit.
If you have a poor sore (under 629), go for credit card meant for borrowers with bad credit. These cards are the best choice because they are designed to help you improve your credit status.
- Go for a secured card.
These types of credit cards are designed to help borrowers boost the FICO score. You deposit a lump sum and then utilize an equivalent amount on the card.
This kind of arrangement helps you improve your credit.
- Be patient
Perhaps it isn’t the time to chase after a new travel or rewards card with worldwide travel limitations and all fun spots closed.
Work on establishing your credit to increase your chances later when lenders are more willing.
- Study market trends
COVID-19 has led to unprecedented changes across the market. Even credit card rules and regulations are changing.
Plus, newly fangled card types may surface in the future, so you want to be all ears out to grab any better offers.
It’s time to rethink your strategy when it comes to seeking credit. And when your approach finally bears fruits, remember to spend the money wisely.
Author Bio:- Michael Hollis is a Detroit native who now lives in Los Angeles. He is an account executive who has helped hundreds of business owners get merchant cash advance. He’s experimented with various occupations: computer programming, dog-training, scientificating… But his favorite job is the one he’s now doing full time — providing business funding for hard-working business owners across the country.