When you apply for a credit card, banks and lenders assess your ability to borrow responsibly. The major factors they consider are:
- Credit history: Your past repayment behavior indicates how reliable you are with debt. Late or missed payments can hurt approval chances.
- Credit score: A numerical summary of your creditworthiness, usually ranging from 300 to 900 in Canada. Higher scores improve your odds.
- Income and employment: Lenders want proof that you earn enough to repay your balance. Steady employment is a potent factor.
- Debt-to-income ratio: The amount of debt you already carry compared to your income. A high ratio signals higher risk.
- Age and residency status: You typically must be the age of majority in your province and a resident or permanent resident of Canada.
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Each institution has its own policies, but showing responsible money management improves your chances of approval.
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