Store credit cards are a kind of credit card that usually offer more relaxed qualification requirements than traditional credit cards. As the cards are only good for purchasing merchandise from a particular store, they do not have as much risk as general credit cards that can be used anywhere.
While some store credit cards have lower requirements, the best way to easily get any credit card is to have a good credit score.
What are the credit history requirements for store credit cards?
Each store credit card will have its own credit requirements for an individual to qualify for the card. Credit is also not the only aspect that store credit cards use to qualify applicants; annual income is also a major factor in conjunction with credit scores to determine an applicant’s approval for a store credit card.
As a perfect credit score is not a reality for every individual, many will look for store credit cards with lower credit requirements. A store credit card can be a good addition to help improve credit scores, as they are easier to qualify for.
What is credit history?
An individual’s credit history is a record of all the payments that an individual has made on loans, utility bills, and credit card bills. A credit history usually goes back for seven years, and it can also show bankruptcies, civil judgments and liens or garnishments.
A credit score is a number that is assigned to designate the level of creditworthiness of an individual. Ranging from 300 to 850, a score over 740 is desirable to qualify for store credit cards, regular credit cards and the best interest rates on loans.
How does credit history affect a credit card company’s decisions?
An individual’s credit history shows lenders such as banks and credit card companies how likely a person is to repay the money borrowed through a loan or a credit card. It is also used by insurance companies and some employers to determine the responsibility level of an individual.
A history of on-time payments for bills and loans shows that an individual makes sound financial decisions. A history of late payments, charges going to collection agencies or other forms of loan default show lenders that an individual is not likely to repay money borrowed on credit. Those with a bad credit history will have a hard time getting store credit cards, personal loans and unsecured credit cards.
How can I find out my credit history?
Every American is entitled to one free credit report in a 12-month span from each of the three major credit reporting agencies:
It is a good idea to review a credit report every 12 months at a minimum to check for inaccurate data and negative information. Inaccurate information can be changed by taking it up with the credit reporting bureau. Accounts that have gone to collection or civil judgments should be paid in full with the creditor or collection agency.
What aspects of a credit history make it easy to get credit cards?
A good credit history will make it easy to get any credit card, but it goes beyond just paying bills on time. Credit histories should have a variety of credit in credit cards, auto and personal loans and cards such as store credit cards.
Those with the best credit histories have many different forms of credit, but they also follow a specific formula regarding the ratio of debt to credit. Everyone should strive to have a 30% or lower debt to credit ratio. Every credit card has a limit, which is the amount of credit extended to an individual. The balance of a credit card, or the percentage of your credit card limit used, is the debt.
If an individual has a credit card limit of $1,000, then the balance on the credit card should not exceed $300, or 30%. Any debt to credit ratio that is over 30% will likely to have a negative effect on the individual’s credit score and credit history.
Those who keep their debt to credit ratios under 30%, pay their bills on time and have a history of different kinds of credit will have the best credit histories and scores; those with the best credit histories and credit scores will find it extremely easy to get any kind of credit card.
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