We all know that building credit is an important component of financial security, but if you have a low income it can be difficult to get a credit card in the first place. While obtaining a credit card is mostly determined by your credit history and income, there are some adjustments you can make to increase your chances of getting your application approved.
Make sure you’re including the right people. Credit card companies want to make sure that a debtor will be able to pay off any debts that accrue while they have an account. For this reason, they will ask about your income. Be sure that you’re including all of the right people when you count your income.
Don’t forget about your side jobs. If you make more money, you seem like less of a credit risk, because you have more of it to repay your debts. A lot of people work gigs and side jobs throughout the year to make a little extra money. You are entitled to include all of your income, and not just your primary source of income, when you are applying for a credit card. Whether that is a musical gig at the local bar or mowing your neighbors’ grass, if it brings in money, it counts.
Reduce your expenses. The fewer standing expenses you have, the more money you have to pay for your credit card. If you have a car payment, consider trading in for a less expensive model. If you rent furniture and appliances, purchase them instead, even if you have to buy your furnishings one by one rather than in sets. Consider refinancing your home to reduce your mortgage payment, or relocating to a less expensive property if you rent.
Consolidate the debts you do have. If you already have credit cards, consider transferring some of the balance of higher interest cards to lower interest ones, saving you money on interest. The less you spend on interest, the more money you have, which makes you seem like less of a credit risk. While it’s best to split your balances among different credit cards, you can still minimize the interest you’re paying.
Open a checking and savings account. Your potential creditor wants to know that you have a viable way of paying the bill, and without a checking account, that’s very difficult to do. The credit card application will ask you if you have one or both, and having both is really good; it makes them think that you must have money leftover, tucked away in case of emergency.