|
  Dear
Dr. Don,
I have a fairly good credit score of 650. My
question is, why is it so hard for me to get a credit card, even
an in-store credit card? I checked my credit report and nothing
seems wrong, so what's the deal? Is it because I never had a credit
card? And why do people with really lousy credit always get more
credit offers?
-- Kris Cardless
 Dear
Kris,
I hate to be the bearer of bad news, but a credit score of 650 isn't
a fairly good credit score. The chart below shows the distribution
of credit card scores, and 58 percent of Americans with a credit score
have a higher credit score than you. If your credit score was 649
instead of 650, then 74 percent of Americans would have a better credit
score than you. That one-point difference really doesn't buy you much
when applying for credit.
A credit score is based on your credit report, which
shows your past history in managing credit. A limited credit history
doesn't give the credit card companies much to go on in deciding
whether to extend you credit.
Don't be envious of people getting a lot of offers
for credit cards in the mail. The teaser rates posted on the front
of the envelope are only available to prospects with a strong credit
history. Credit card companies use risk metrics to decide on both
a credit line and an interest rate and that decision isn't made
when they mail the offer but rather after a consumer applies for
the card.
Multiple inquiries don't help your cause, especially
with credit cards. Every time you apply for a card that application
stays on your credit report for two years. A lengthy list of declined
applications makes you look desperate for credit and lenders hate
to loan to desperate people.
The current practice of department stores to offer
credit cards that are both store cards and national cards (MasterCard,
Visa, etc.) may be an opportunity for you to get a national card
with a marginal credit rating.
Check your credit report to see how many declined
credit applications are on your report and when the last one was
reported. Let some time pass before applying again. You don't have
to wait two years, but several months is a good idea. Apply to one
credit card provider. Bankrate's
credit card search is a good way to find companies offering
cards with the features you want.
Start with your credit union if you belong to one.
Try a combined store/national card if you don't belong to a credit
union. If that doesn't work, then you'll need to start out with
a secured credit card and build your credit history with that.
|
