Credit Cards and Your Credit Level

When you apply for a credit card, the credit card companies are going to look at a few factors in order to determine whether to accept or deny you.  The most prevalent of those factors is going to be your existing credit history.  What kind of credit history you have will depend on how you have managed debt and credit throughout your life.  Determined by what you’ve done in the past, you will have one of four general types of credit.

You might have excellent credit.  This means that when measured against how much money you are making you have very little existing debt relative to the amount of available credit.  The more money you are making the better the more debt you may have, but this again will be measured on the total amount of available credit you have.  Excellent credit would also certainly imply that you haven’t had problems with late or missed a credit card payment in the past.

If you were not quite in the excellent credit category you probably would be assessed as having good to average credit.  This means that maybe you have a pretty significant amount of debt when you weigh it against how much money you have coming in.  This might also include one or a few late payments on credit cards in the past 24 months, but you haven’t gone past 90 days delinquent or defaulted completely on anything.

The better credit you have the better chance you have of being accepted when you apply for a card.  There are several cards that you will be able to apply for and be accepted for if your credit falls under the scope of either excellent or good to average.

If you don’t fall in these categories you either have rather poor or no credit.  Bad credit or poor credit is when you’ve had a history of large debts and consistent failures to make timely payments.  Bad credit would also apply to anyone who has declared bankruptcy.  Bankruptcy and judgments are public records that are revealed on your credit report.  These records can be the most damaging to your credit profile in the short term.  Just because you have bad credit though does not completely exclude you from filling out a credit card application and receiving a credit card.  You just have to explore the options that are available to borrowers with bad credit.  Given that the credit card market is extremely competitive there is a vast array of options for those with impaired or less than perfect credit.

If you don’t have excellent, good, average, or bad credit, then you must just have no credit at all.  This happens mostly to younger demographics that haven’t had a chance to establish any kind of a credit rating because they have no history of borrowing.  There are options for people in this category as well; again it just takes a little bit of shopping around to find the best option depending on your credit circumstances.  Often, with borrowers that have a limited credit profile, greater weight is placed on income, housing and employment.  Shop for a credit card online and you will be able to find numerous credit card applications for those individuals with limited or no credit along with offers for bad credit cards.

Depending on which of the above credit categories you fall under, there will be several effects on any credit card application you make with a credit card company.  The first will be the determination of what kind of credit card you get approved for.  This would be the difference between the regular and gold options some companies carry, or possibly the requirement to get a secured credit card instead.  Your credit will also help determine how high of a limit you are approved for as well as the credit card APR your borrowing is assessed at.  That credit card interest rate can be different depending on how your application scores with the credit card company based on their parameters for weighting the factors in the credit card application.  Shopping and comparing several credit card offers can assist greatly to make sure you obtain the best credit card regardless of your credit profile.  Finding the best credit card rate is easy when comparing credit cards online.