Are Creditors Holding Back Due to the Pandemic?

 

Over the past couple of months, we’ve noticed a trend in the number of approvals for new credit cards… and unfortunately, it’s not good news. With the record job losses that came with recent efforts to slow the spread of COVID-19, we’ve also begun to see records of a different kind. Creditors are hesitant to issue new credit to both businesses and individuals. All types of loans, from homes to cars to businesses, as well as all types of credit, including credit cards, have been affected. So, how do you get a credit card these days, especially if your credit is less than stellar?

 

Truthfully, if you have less than perfect credit, you may have a real problem getting a new credit card right now. Not only are creditors holding back, but in some cases, they’ve essentially stopped lending money (or opening new accounts) altogether. And that’s across the board – from those of us with excellent credit to those of us with no credit. Why? Because the risk is now greater that they will not get paid back should something happen to your job.

 

So, how do you get credit these days? Well, to be honest, in order to get credit, you may have to be willing to offer something up as a sort of security against the loan. If you’re buying a home, expect the bank to be more insistent on the size of your down payment. If you’re getting a personal loan, you may have to allow the creditor to put a lien on your car. And if you’re getting a credit card, you may have to start with a secured card.

 

(Click here to see our secured card options.)

 

Times are tough. The country is in a recession. But you can still get credit – it just may not be as easy as it has been in the past.

Easiest Way to Get Approved for Credit

When it comes to getting credit of any kind, there’s really no “magic” approval options. Credit card companies look at your credit score, factoring in your payment history, available credit, and other things, and then they determine whether or not you’re a good risk for them to take should they decide to extend credit to you. In spite of that, there are easier ways to get approved than simply applying for every credit card out there.

First and foremost, you need to know your credit score before you start looking at credit card offers. Why do you need to know your credit score? Because it’s easier to find a credit card that will approve you if you know where you fall on the credit scoring charts.

Secondly, and equally as important, you only want to apply for credit cards that target people within your credit range. You’re more likely to be approved if you apply to credit cards within your credit range and you don’t want to apply for cards that are way outside of your credit range. Either you won’t be approved if you apply for credit cards that are way above your range or you’re likely to pay too much interest if you apply for cards that are way below your credit range.

So, know your credit score and then choose credit card offers that specifically target people with your credit score!