What Happens After You Apply For A Credit Card

You have successfully applied for a credit card! Now what happens next? Let us dive into the verification and approval stage and discuss exactly what events take place once you have applied for your favourite credit card. Everything that happens is quick and creditors evaluate certain parameters before giving approval for your new credit card. Read on to know more:

Identity Verification of Applicant

Credit card issuers perform identity checks and verification just to make sure that the applicant is not a fraudster. This can involve comparing personal information from a credit card application to a credit report or examining a credit history for signs of fraudulent activity.

Credit Check of the Applicant

To check if you are worthy of a new credit card payment, credit card issuers assess your income, monthly housing expenses, and credit score, to name a few. Upon this result, the interest rate and credit limit on new account will be decided. Your credit reports of two or three years will also be checked to make a decision. The credit check on each of these reports accounts for same number of hard inquiries. Regardless of credit scores, custom parameters might also be used to approve or deny your application. An example of this may be – even if you possess a good credit score, you might still get rejected if you recently opened multiple credit cards.

What’s the Current Status of Your Application?

After the automation process of fraud and credit check, three potential outcomes are possible, which are:

1. Application Approved

Once your application is approved, you will get to know your card’s annual percentage rate (APR) and credit limit. You might get the credit card number and details straight away to use it for online purchases. The second possibility may be that you can add your new card account to a mobile wallet. Or, just wait for the new card to arrive in the mail and then use it. After your card is reported to the bureaus (Experian, Equifax, CRIF), it can take around 30-60 days for the account to show up in your credit report. Once this is done, the account’s information, including its age, payment history, credit limit and reported balance start affecting your credit scores.

2. Application Denied

Suppose your application is denied. You won’t get the credit card, but the hard credit inquiry will still stay on your credit report for two years. You will get an adverse action letter from the credit card issuer stating that they denied your application, although partly, according to the information in your credit report. In return, you can call the credit card issuer if you want your application to be reconsidered. The instances for denial may be your credit reports were frozen or you had other cards from the issuer, and they didn’t want to extend you more credit. The decision can get reversed if you improve your reports or ask the issuer to move available credit from an existing card to the new card.

3. Further Review Required

Sometimes, issuers might be uncertain about your approval. A direct approval or even denial might not be given as some additional information might be required by the issuer. An example of this can be suppose you applied for a small business credit card, the issuer might want you to share documents to verify that you own the business. Or, you might be required to share additional identity or income verification documents.

Conclusion

The process of approval or denial of a credit card involves thorough verification. You must stay informed and find out the status of your application and take proactive steps if there are issues with the approval. Once you get the card, use it wisely and responsibly to maintain and improve your credit score. you can get from a lending agency that you can use for many purposes. For example, you may use a personal loan to clear off debt, do home renovations, or plan for an ideal wedding. Personal loans are given by banks, credit unions, or online lenders like