Understanding Credit Card Appraisal

Everybody wants a credit card to maintain a social status. People feel that having a credit card shows that you are affluent and can afford anything. But tell me, when has it happened that what we desire always gets us? The answer to this question for the rich will be always, while for others, it would be maybe once in a while. The same goes for credit cards, where people desire a nice, rewarding card but then get rejected for mere reasons upon applying. This is where credit card appraisal comes in. For example, you visit the doctor for a checkup to see whether you are healthy or not. In the same way, credit card appraisal is like sending your card for a checkup. It checks your spending habits, credit score, and payment history to see how you’re doing.

Credit card appraisal, also known as credit assessment, refers to the thorough evaluation of an individual’s financial details and creditworthiness by credit card companies. From the beginning of application submission to the final decision of approval or rejection, each step in the credit card appraisal process is important in assessing an applicant’s suitability for acquiring a new credit card. Continue reading to learn the meaning of credit card appraisal, its process, and its eligibility criteria.

What is Meant by Credit Card Appraisal?

Credit card appraisal is the process of evaluating an applicant’s application for a new card by credit card companies. During this evaluation, the company checks the applicant’s financial information, credit history, and creditworthiness to determine eligibility for a credit card. This assessment helps the credit card company make a proper decision on whether to approve or reject the applicant’s application.

To determine one’s creditworthiness and whether he is eligible for a new credit card or not, a thorough assessment is done, including submitting an application with all the required documents. The credit card company then prepares a detailed report based on the evaluation and decides whether to accept the application or reject it.

What is the Process of Credit Card Appraisal?

The credit card appraisal process includes several steps that are important in determining the applicant’s eligibility for a new credit card. All the steps related to the process are explained below in detail.

Application

The process of credit card appraisal starts with the submission of the application for a new credit card which includes all the personal details related to the applicant as well as the employment details.

Documentation

After submission, the credit card company, upon receiving the application, asks the applicant to submit all the documents related to the information provided in the application, which includes identity proof, address proof, and documents related to income, such as salary slips or tax returns.

Credit Assessment

Upon receiving all the documents, the credit card company then conducts a detailed analysis of the applicant’s credit history, which involves credit reports from CIBIL. The reports are checked to see the applicant’s payment history, recent credit inquiries, and outstanding debts.

Financial Analysis

After the credit assessment is done, the credit card company will check the applicant’s financial situation, which may include his annual income, existing debt, and whether he is financially stable.

Report Preparation

After all the analysis and assessments are done, the credit card company then prepares a detailed report on whether the applicant is eligible for a new credit card or not.

Approval or Rejection

The credit card company, after a thorough evaluation and checking the applicant’s creditworthiness and financial stability, then makes a decision on whether to approve or reject the application or not.

Administration

Suppose the credit card company approves the application. In that case, it proceeds with the administrative tasks related to issuing the new credit card, which involves setting the credit limit, establishing the terms and conditions of the card, and preparing the necessary documentation for the applicant to sign.

Factors that Assess Credit Card Appraisal

Credit History

Credit history plays an important role during the credit card appraisal process. The credit card companies review your report to see how you’ve managed your credit in the past, including payment history, outstanding debts, etc.

Financial Situation

One of the most important factors in credit card appraisal is the financial situation. The credit card company will evaluate your annual income, current debt, and ability to manage additional credit.

Payment Behavior

When making timely payments on your current credit accounts can positively influence your credit card appraisal as it shows how responsible you are for paying back on time.

Credit Inquiries

One should keep in mind that when your credit report is being checked, all the previous credit card applications and loan requests will also impact you as it may raise concerns. If you have applied for a number of cards in a short span of time and those applications have been rejected then the credit card company will think before approving your request.

Employment and Income

The credit card company will assess your employment details and income to determine whether you have a reliable source of income.

Eligibility Criteria for Credit Card Appraisal

To be eligible for credit card appraisal, one needs to have a good track record of responsibly using a credit card. This means making timely payments, using only a portion of your available credit, and avoiding too many credit inquiries, which are some of the important factors to keep in mind.

• Age: The applicant should be within the age limits set by the credit card company, that is typically between 18 to 65 years old.
• Income: The applicant should have a stable source of income, meeting the income requirement set by the credit card company.
• Credit History: Credit card companies prefer good credit histories with responsible repayment behavior. A higher credit score increases the chances of approval.
• Debt-to-Income Ratio: With this ratio, credit card companies compare a person’s current debt to their income to see if they can handle more credit or not.
• Nationality: Some credit card companies have specific eligibility criteria based on the applicant’s nationality.

Bottom Line

Understanding credit card appraisal is important for anyone who has a credit card. It’s a way for credit card companies to help you build good credit and provide you with more opportunities. The appraisal process includes a thorough assessment of an individual’s personal and financial details along with his creditworthiness, which will determine if he is eligible for the card or not. One should remember that from the start of the application process to the decision of approval or rejection, every step in the process is important. By using your credit responsibly, you can make the most of credit card appraisal.