How Your Credit Reports Can Affect Your Credit Card Application

Information verified correct on October 24th, 2016
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A credit report will be requested by the credit card company once they have received your application for a credit card.

This is a step that is never overlooked by the card company since the decision whether to issue you a card or not is based on what they see in this report. Keeping your record free of black marks is the only way to ensure that the door to credit stays open for you your entire life.

Your credit card application and what lenders look for

The first thing a credit card company is going to look at is your payment history. In Australia, negative information about your payments are entered on your credit file and there are no entries if you have been making payments on time. Therefore, if you do not have any entries in the payment history category, this means that you are more likely to be considered for an approval on your application.

Late payments

Any payments that are more than sixty days past due will be reported to the credit reporting companies. This applies to any utility bills you have to pay and any plan you may have for a mobile phone. Even these small payments need to be made in time every month to keep your credit record clear. Lenders will also look for debts that have become collections, foreclosures, court judgments and writs, liens, and bankruptcies.

Available credit

The next factor that a lender will take into consideration when deciding if you should be given a card is how much credit you have currently available. The credit card company must decide whether you have enough credit to handle already and if more would only be a burden for you.

Vendors will also screen borrowers by looking at how long you have used credit. If all else looks good and you simply haven’t built up a credit history yet you will often be considered for a card with a higher interest rate to begin with. Later on you will be able to apply for lower interest.

Credit applications

If you have been applying for a lot of different credit within a short amount of time you will appear desperate and may be turned down for a card simply based on that. Try not to apply for too many cards or credit within a short time span.

Credit reports have a big influence on credit card applications so you need to be sure that you keep your record clean at all times. If the lender sees that you have a good credit score your chances of getting approved for a card are very high.

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4 Responses to How Your Credit Reports Can Affect Your Credit Card Application

  1. Default Gravatar
    Curious | July 23, 2014

    If I apply for a credit card/loan with a bank and they determine the maximum credit limit they will provide. If it is not what I am looking for, as in being too low for the debt consolidation I want to do, am I able to reject their offer? If I do reject their offer, is that something that voids the request they have made on my credit report?

    Ultimately I am looking at 2 current credit offers. 1) is a personal loan which can provide a higher borrowing capacity if approved the amount I am looking for at a good interest rate to consolidate all my current high interest debt. 2) Should the personal loan option not give me the amount I am looking for, my preference would be to reject their offer and apply for one of the 0% balance transfer offers going around at the moment and at least consolidate some of the debt.

    So just want to know if what I am thinking is even feasible as I don’t want to be in a situation where I don’t get the credit limit I want via the personal loan at low interest rate when I can get a 0% balance transfer on a comparable maximum credit limit.

    • Staff
      Shirley | July 23, 2014

      Hi Curious,

      Thanks for your question.

      Unfortunately all applications that you finish do appear as an inquiry on your credit history.

      As a rule of a thumb, a credit inquiry every 3-6 months is considered favourable by credit providers. So if you’re not happy with your first offer, you can reject it and you may want to wait for a few months before applying for the alternative option.


  2. Default Gravatar
    Luisa | November 3, 2011

    I don’t have an defaults or late payment on my credit file, but my car loan creditor and mortgage have internal history that is not good. With a default and late payments. Do credit card companies actually physically call your creditors or do they just go by the credit report?

    • Staff
      Jacob | April 10, 2013

      Hi Luisa. They go by the credit report. They can see how many enquiries for credit you have had in the past. Jacob.

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