Welcome to the credit card marketplace's new normal.
Before 2008, a credit score of 720 or higher would have guaranteed you access to most of the best credit cards on the market. Today, you'll need more than 800 points on most credit-scoring systems to get your pick of the best deals. That doesn't mean you're stuck with what's already in your wallet, though. Follow these five steps to overhaul your credit card lineup:
- Develop a strategy for using credit cards. If you're saying "yes" to every instant-approval credit card offer you see, banks will keep saying "no." Figure out what kind of card you're looking for, and who you want to do business with. Your wish list will change based on those goals: an airline credit card may offer better value if you plan to travel, while a cash-back card can save you money when your purchasing patterns vary. You can achieve your goals with just one or two cards, when they're the right ones.
- Watch your credit utilization. Banks scrutinize the gap between your credit card balance and your total available credit. If you're using more than 30 percent of the credit limit on any one of your existing cards, you're out of the running for most new accounts. Pay down that debt or redistribute it using balance transfer offers.
- Get selective about your banking relationships. Your credit score could be stuck in the 740s because you're applying for so many new credit cards. Put your applications on ice for the next three months and watch for a positive change in your credit score. Focus on just the handful of banks with whom you really want to do business.
- Check your credit history for potential negative information. If you haven't reviewed your credit report recently, you might have missed some mistakes that could drag down your credit score. Dispute records that aren't yours, so you can bring that score back up.
- Get more lines of credit in your own name. As half of a married couple, your credit report could be telling just part of your story. Make sure your on-time mortgage and auto loan payments get reflected on your credit report, not just on your spouse's. Ensure that any of your spouse's late payments are bad habits aren't leaking into your credit reports as "authorized user" items. Open a secured credit card with a bank or credit union so you can show an additional, positive trade line.
As your credit score rises, try to secure a credit card that saves you money on your everyday transactions, while lining up enough reserve credit to help you with an emergency or unexpected purchase. Then, pace yourself. Revisit this list every few months as your credit profile improves.