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What information do credit card lenders need?
When you apply for a credit card, there’re a few things lenders will ask you for before they decide whether to accept your application.
But what information do lenders typically need? Let’s find out.
What details will they ask for?
When you apply for a credit card, lenders will request certain information so they can confirm your identity and determine whether you’re a responsible borrower.
You’ll be asked to disclose some basic personal details, including your name, current address and how long you’ve lived there, your employment status and your income.
In some cases, lenders will request additional information such as any previous addresses or how long you’ve worked for your employer.
They will use this information to check you are who you say you are and look at your credit history through one of the credit reference agencies. Your credit history will show them how well you’ve managed borrowing credit in the past.
However, as well as these basic checks, each lender also has their own criteria for accepting or declining borrowers. So if you’re turned down by one lender, it doesn’t necessarily mean you’ll be turned down by other credit card providers.
What about my employment status?
Your employment status and income is key to a lender’s decision because it helps them work out whether you’ll be able to afford your monthly repayments.
If you are a temporary worker, self-employed or earn below a certain salary, a lender may still offer you a card, but at a lower credit limit or with a higher interest rate. This can reduce the chance of you paying more than you can afford, and also lowers the risk to them.
Meanwhile, if you’re self-employed, you may find that lenders will need additional information when you apply for a credit card. In most cases, they will request your average monthly income to see whether you’ll be able to manage your credit card minimum payment.
And if you’re unemployed and applying for a credit card, you will have to show that you have other means and that there is room in your budget for your monthly repayments. Lenders will reject your application if they think you won’t be able to repay what you’ve spent.
Will they know my credit score?
If you’ve ever signed up to a credit checking service such as Experian or Callcredit, you will have been given a unique credit score. This is calculated from your past borrowing record and how well you’ve previously managed credit.
However, the lenders you apply to don’t see this credit score – they only see your credit history. As with lenders, each credit checking service has their own unique criteria by which they measure borrowers. There is no such thing as a universal credit score.
So what about my credit history?
To put it simply, your credit history is a record of how well you’ve managed credit in the past. It details the lines of credit you’ve had open to you and whether you’ve struggled with the repayments.
For example, if you’ve previously missed payments or ever been issued with a County Court Judgment (CCJ), this will be visible to lenders when they look at your credit history.
These negative marks stay on your credit history for six years or so.
How do I check?
Before you apply for credit card, it’s worth signing up to a credit reference agency. The great news is you can check your credit history for free - find out more here.
It’s important you check to see if any errors are on your report. If there are – maybe your current address is wrong or an account you’ve closed is listed as open - you can look to get these corrected to avoid them harming your future credit card applications.
If your credit history is not in the best shape, don’t worry. You can find out how to give your credit history a boost in just three months, here.