When you apply for an instant approval credit card or any credit card for that matter the credit card issuer will conduct credit checks. Credit checks are ubdertakento to establish your credit worthiness an ensure that you are a suitable applicant. This helps the credit provider minimise potential default situations. Many consumers assume that these credit checks willnot be undertaken for instant approval credit cards and this is not the case.
In fact if expecting an instant approval credit card application to be approved, one needs an excellent credit rating as the credit check process is quicker.
The checking takes several forms; initially your identity has to be confirmed. This is important to avoid a fraudulent application under a false name or fake identity. Should these type of applications slip through undetected the credit card company stands to lose their money, since you can’t take legal recovery action against a non-existent person. It is quite normal for a credit provider to ask for proof of identity, particularly with store cards. However, these days it is often easier to check a person’s details online to see whether they match the supplied information. When you apply for a credit card, you should be prepared to be able to supply proof of identity.
Another of the important credit card application checks is of your income. This is not intended so much to verify the level of income but rather to establish the truthfulness of the applicant. Historically this has often been difficult to check, but new techniques and information have made it easier for credit card providers to have a reasonable estimation of an applicant’s income. When it is found that the estimates vary too much from the information supplied by the applicant, they can be asked to expand on the discrepancies.
There has been a lot of criticism regarding people being lent monies their income doesn’t justify and they can’t afford to repay. A lot of this has been put down to inadequate income checks. It is likely that more attention will be paid to income estimations in the future.
One of the credit card application checks will be of your current credit rating. This is an important measure of your credit worthiness, and credit providers use this as a measure of the applicant’s potential failure to pay their debt in the future.
When credit providers send you a pre-determined offer they will have done some initial checks as to your credit worthiness; if you accept the offer your circumstances will be scrutinised again when your application is submitted.
Low interest credit card applications and cards for people with a low income or a poor credit history will undergo a fairly rigorous scrutiny, due to the perception they are likely to be high risk cases.
