Who Qualifies For Credit?
Depending on your situation, you may be more or less likely to be granted a new line of credit. Though your circumstance may affect your creditworthiness, lenders are not allowed to discriminate against you or deny your credit for any other reason than poor creditworthiness. This section will explain your rights in applying for credit. It is important to understand first which groups of people are eligible to apply for credit.
High School Students
Any student who is 18 years old is a likely candidate to receive an application for a credit card. Obtaining and making prompt payment on a credit at a young age can be a great way for a student to begin building credit early. Lenders often consider full-time school attendance to be a full-time job and, therefore, don’t require a student to be employed. Usually, these credit cards come with fairly low limit and require a parent or guardian to guarantee the line of credit. The guarantor information section will require the parent or guardian to submit information such as full name, address, Social Security number, home telephone number, business telephone number, employer’s name and monthly income. Disclosures listed in the application will include the interest rate, annual fee, grace period for the repayment, method of payment and over-the-limit fees.
Employed People
Among employed people, the higher your income and longer your term of employment, the more like you are to qualify for credit and get it at a good rate. If you have held your job for at least one or two years and meet the issuer’s income requirements, you may also be offered with credit. Besides employment, the lender is likely to consider your income stability and your character reported in your credit history and the length of time you have lived in one place.
Self-Employed People
If you are the boss for yourself, credit cards can be your best friends in your business transaction. They provide quick cash for emergencies and business expenses. But those who are self-employed often have a more difficult time getting credit because they generally pay their own paycheck ad are traditionally seen by lenders as more risky. A self-employed individual may be asked to prove that they have held the same stable self-employment for a certain number of years to qualify for a new credit. If you own a small business, you have likely already taken out line of credit. Hence, your existing creditors with whom you have a good payment history are the best place to look for more credits. If you make your payment consistently even with the minimum payment, your existing creditors will likely increase your limits so that your have more credits to use.
Unemployed People
If you have been employed and were laid off or left your job and are still not working, your existing credit should not be affected as long as your continue to make at least the minimum payments on time. If you begin making seriously late payments, a lender can cancel the account.
On the other hand, if you are unemployed and are seeking a new line of credit, you fall into one of the riskiest categories for credit lenders. Because creditors look for job stability, you will probably not meet lenders credit worthiness criteria. If you can, it is best to wait to apply for a new line of credit until you have been employed for at least a year. If you need a credit, try to use the method mentioned in previous chapter: "Getting Credit for the First Time".
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