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How do you get approved for your first credit card in Canada?
How to qualify for a credit card?
Qualifying for a credit card in Canada is relatively straightforward. Most credit card companies have an age requirement to qualify.
The most important factor in determining eligibility for a credit card is your credit score. Credit scores in Canada range from 300 to 900. Generally, 660 is considered good and will allow you to qualify for most credit cards. However, some higher-end cards may require a score above 700.
Other factors such as income and debt levels are also taken into account when evaluating a credit card application. Most providers will require that applicants have a steady source of income and a reasonable amount of debt relative to their income.
Some providers may require additional documentation to verify identity and income. This may include a driver’s license, a utility bill, or a pay stub.
What to do if your application is rejected?
So, you’ve applied for a credit card and been rejected. What’s next?
It’s disappointing and frustrating to be rejected for a credit card application. However, there are steps you can take to better understand why you were rejected. Understanding why you were rejected will help you take action to improve your chances for approval in the future.
The first step is understanding why your application was rejected. The bank should send you a letter explaining why your application was denied. Having too much debt, a poor credit score, or a short credit history are common causes of rejection.
Once you understand the reasons, you can take steps to improve your creditworthiness. Make a plan to pay off existing debt. Focus on making payments on time and avoid applying for more credit if your credit score is too low. Look for a credit card that doesn’t require a minimum credit score if you don’t have much of a credit history.
You should also review your credit report for any errors. A free copy of your credit report is available from Canada’s major credit reporting agencies, Equifax and TransUnion. Check for any inaccurate information and dispute any errors. This can help improve your score and increase your chances of being approved for a credit card.
Only apply for credit cards that you have a good chance of getting approved for. You don’t want to risk being turned down again and damaging your credit score further. Find a card that suits your credit profile by doing some research.