5 Things To Never Write On A Credit Card Application

Summary

In this informative video, Noel Randle shares five crucial mistakes to avoid when filling out credit card applications. He advises against stating retirement or self-employment, reporting excessively high or low income, and using funds for risky ventures like real estate investing. Noel emphasizes the importance of understanding one's credit report before applying and cautions against relying solely on child support or alimony as income sources. His insights aim to increase approval chances by presenting a more favorable applicant profile to lenders.

Takeaways

• 🚫 Never state you are retired or self-employed on a credit card application; instead, mention a business entity you are employed by.
• 💰 Avoid stating income that is either extremely high or low; aim for an amount that is realistic and aligns with your financial obligations.
• 💼 When asked about the use of funds, focus on business expansion and marketing, as these are viewed favorably by lenders.
• 🔍 Before applying, pull your credit report to understand your financial standing and be prepared to address any questions about it.
• ❌ Do not list child support or alimony as your sole source of income, as they are considered volatile and unreliable by lenders.
• 🏦 Lenders prefer applicants with stable employment and a middle-class mindset, so tailor your application to meet these expectations.
• 🤔 Be cautious with the information you provide; high-risk activities or ventures may lead to application rejection.
• 📈 Emphasize the positive impact of the credit card on your business, such as increasing revenue through marketing and promotions.
• 📋 Understand the importance of accurate and reasonable income reporting to avoid raising red flags with underwriters.
• 🛡️ Having a clear plan for the use of funds demonstrates financial responsibility and increases the chances of approval.
• ✅ Utilize resources like Creative Credit Solutions for credit restoration and to improve your chances of getting approved for credit cards.

Q & A

What are the five things one should never write on a credit card application according to the transcript?

The five things to avoid writing on a credit card application are: 1) stating you are retired or self-employed, 2) declaring income that is either too high or too low, 3) mentioning the use of funds for personal expenses like vacation or debt repayment, 4) not checking your credit report before applying, and 5) using child support or alimony as your sole source of income.

Why should one not mention being retired or self-employed on a credit card application?

Mentioning retirement or self-employment can be a red flag to lenders as it may indicate a lack of stable income, which is considered high risk. Instead, it's better to indicate being employed by a business entity that you own, which can portray a more stable employment situation.

What is the suggested approach if the application asks about employment status and the person is retired or self-employed?

The person should instead write that they are employed by a business they own, providing the name of the business as an example. This approach can help avoid the negative perception associated with being retired or self-employed.

What are the implications of declaring income that is too high on a credit card application?

Declaring income that is too high can raise red flags with underwriters, who may question the validity of such high earnings, especially if they don't align with the applicant's reported assets or lifestyle. This can lead to unnecessary scrutiny and potential application decline.

Why should one avoid stating income that is too low on a credit card application?

Stating income that is too low can make it seem like the applicant will not be able to afford their existing debts, including the potential credit card debt, which can lead to the application being declined.

What is the recommended income range to declare on a credit card application?

The transcript suggests not declaring personal income more than approximately $275,000 per year, as this is an amount that underwriters can more easily understand and relate to.

What are some acceptable reasons to mention for the use of funds on a credit card application?

Acceptable reasons include using the funds for marketing, business expansion, hiring employees, running advertising campaigns, or hosting events. These are seen as positive investments that can increase business revenue.

Why is it important to check your credit report before applying for a credit card?

Checking your credit report before applying allows you to be aware of your credit status and history, which can help you address any potential issues or inaccuracies before they impact your application.

What should one do if they rely on child support or alimony as their main source of income when applying for a credit card?

It is advised not to mention child support or alimony as the main source of income on a credit card application, as these are considered volatile and unreliable forms of income from the lender's perspective.

What resources are mentioned in the transcript for those needing help with credit issues?

The transcript mentions Creative Credit Solutions (creativecreditsolutions.net) as a resource for credit restoration and Justin Merch Consulting for business credit and funding needs.

What is the difference between credit repair and credit restoration as mentioned in the transcript?

While the transcript does not explicitly define the terms, credit repair generally refers to correcting errors on a credit report, whereas credit restoration is a broader term that can include rebuilding credit over time through responsible financial behaviors.