How to get good credit cards with low income?

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Walwen
Posts: 76
Joined: Mon Mar 27, 2023 10:34 pm

How to get good credit cards with low income?

Post by Walwen »

I think I have okay credit. Credit Karma says I have 670. I have a 500 dollar limit secured Discover card. The discover app show my FICO at 700. When I got approved for the credit card back then, it said my credit was at 660. I've never missed a payment or anything. The most contributing negative factor, as far as I can tell, is that I only have 1 card, and that my credit history is very short since I'm young.

I think I am a good canidate for credit card churning because I'm willing to sit down and game plan it all out. I also intend on traveling/hotel stays in the next few years, and I would love to get a really good deal.

I did a pre-auth with no hard credit pull for some highly recommended credit card, I forget which. It told me plainly, "Forget it! You don't meet our income requirements!" Last year I made 10k. This year I expect to make about 15k.

I'm scared to start applying if my income means I'm just going to get denied and have hard credit checks for nothing. But I don't plan on really making much more than 15k for several years.

My local small chain brick and mortar bank offers a few different credit cards, including one with a "150 for spending 500 in 90 days" bonus and points that can be redeemed for hotels. Do I have better luck going local rather than applying online to large companies like Discover, Citibank etc?

In my career, I've met so many people in horrible financial situations, with bad marks on their credit, and thousands of credit card debt, who qualified for new cards with shockingly high credit lines. It can't be that hard....?

Frita
Posts: 942
Joined: Thu Mar 15, 2018 8:43 pm

Re: How to get good credit cards with low income?

Post by Frita »

Scratching head emoji…Our 18 year old got an unsecured VISA credit card in January. He pays it off in-full and on-time each month. His FICO score is 734. He has only applied for this one form of credit. His income is in your wheelhouse but claimed as a dependent. Did the pre-authorization drop your score?

mathiverse
Posts: 788
Joined: Fri Feb 01, 2019 8:40 pm

Re: How to get good credit cards with low income?

Post by mathiverse »

If you have a trusted family member who pays off their CC in full each month and who trusts you, you can ask them to make you an authorized user on their credit card. You can tell them that you don't want access to their credit line, just to be named on the account as an authorized user. The account will show up on your credit report and assuming they are good credit users that will be good for your credit. I have a few family members on my CC for that reason.

Also, you have probably done this, but if not, you may want to check your credit report to ensure there are no anomalies or mistakes bringing down your score. I think you're in the US, so you can check it for free: https://consumer.ftc.gov/articles/free-credit-reports.

Walwen
Posts: 76
Joined: Mon Mar 27, 2023 10:34 pm

Re: How to get good credit cards with low income?

Post by Walwen »

The pre-authotization didn't impact my credit, but it was rather strongly worded "Don't apply! You won't get it!" which worried me. It wasn't like AmEx or anything, I think it was an unsecured Discover card with no annual fee and like 1.5% cashback. I am not claimed as a dependant and my mom has never had me as an authorized user or anything. (She has horrible credit and said it would hurt not help me)

From a Google, it says a lot of cards require somewhere between 10k and 15k minimum income, but of course they don't really disclose that.... And for the best cards, I kept seeing a minimum of 39k per year for approval.

Thanks, I'll look into that... I had a legal name change a few years ago and I'm still finding things that are messed up because of it... I wouldn't be surprised if something is wrong, like my income being reported as 0.

Frita
Posts: 942
Joined: Thu Mar 15, 2018 8:43 pm

Re: How to get good credit cards with low income?

Post by Frita »

We never made our son an authorized user.

Does someone else share your name? A relative had some IRS issues with that.

Walwen
Posts: 76
Joined: Mon Mar 27, 2023 10:34 pm

Re: How to get good credit cards with low income?

Post by Walwen »

I don't think anyone shares my name, or I have never had that issue. I did have to manually sign up for the draft to get my college loans because my new name wasn't on the registry lol.

Here's a speedy development:

I called the bank and they encouraged me to apply and didn't seem worried about my low income. Because they are local, they take into account the age of your accounts with them and the balance in your checking/savings. I applied and was instantly approved!
It's a 500 dollar line of credit, no annual fee. 4% back on dining and fast food. 2% on grocery stores and gas stations. 1% on everything else. But namely- a 150 bonus for spending 500 in the first 90 days. That's really worth it to me.

Credit Karma was also on top of it and gave me a notification seconds after that I had a hard inquiry. However I'm pretty confident this will help my credit over time by my limit doubling and having another account open.

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Chris
Posts: 773
Joined: Thu Jul 22, 2010 2:44 pm

Re: How to get good credit cards with low income?

Post by Chris »

Most of the factors for approval are due to your circumstances, but the general environment is also a factor.

Back when credit was being handed out easily, I was a student with an income ~$10k. I got a card that came with a $2k limit out of the gate. A frightful amount. After a while, I noticed a button on the website called "increase credit limit". I clicked, and the limit instantly doubled! Out of curiosity, I decided to continue... click, click, click. It topped out at $20k :shock:

The consumer credit market tightened up, and I stuck with that one card for several years. This probably helped my credit score, since my credit utilization was so low (1%), but I doubt I would have been approved for another card at the time, since my credit-to-income was so high.

If you're planning on churning, you're right to budget your hard pulls, but doing a handful shouldn't hurt your score much. Other factors to keep an eye on are credit utilization, average age of accounts, and the income you enter on the application. Churning means you'll be applying for the same card again, so it's good to know what numbers work or don't work, so you can avoid unnecessary applications in the future.

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