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How we manage our access to credit is one of the keys to achieving our travel goals. It’s essential we maintain a detailed record of credit card applications and approvals, and manage multiple lines of credit while not carrying a balance at the end of each month. It also requires meticulous planning of where spending is directed, to ensure we earn the associated bonuses on each card.
Recently we shared our top tips for managing your credit score and received some questions asking what credit scores are required to get approved for top rewards credit cards. We want to expand on that in this post and provide some data on credit scores that have been approved in the past, and some added info on what providers are looking at in credit card applications.
There is More to Credit Card Approvals Than Your Credit Score
The first thing to note is that the approval process is not based solely on your credit score. There are lots of factors taken into account, and the formula is constantly evolving. Some of the other factors that determine applications outcomes include:
- Income – It's a no-brainer but income plays a significant role in which applications are approved, and the qualification levels vary for each card. Your income level helps a credit issuer decide how much credit they're comfortable assigning to you. Typically, the more income you have reported, the higher line of credit you'll be provided if approved. Keep in mind that income is the only item in this list that a creditor is unable to obtain from your credit report.
- Hard pulls on file – One of the big pain points of the past summer has been the confirmation of Chase’s 5/24 rule, and the tightening of application requirements across all providers for new rewards card inquiries. Too many recent credit inquiries will adversely affect the outcome of new credit card applications. Lenders show a level of concern when someone is “hunting” or “fishing” for credit in a short amount of time.
- Diversified credit accounts – Lenders like to see an even spread of credit and appear to be more inclined to approve new credit card accounts for applicants that might have a mortgage or auto loan. Mortgages and auto loans are generally considered low-risk loans as their underwriting processes are more thorough than you'd experience with most credit cards. Additionally, mortgages and auto loans come with collateral; the house or car for which you've taken out the loan.
- Age of credit accounts – Much like having a mortgage, older credit lines display a higher level of credit maturity and represent a substantially lower risk than applicants with accounts of a younger age. While past performance is not indicative of future results, for the most part, it is all a credit card issuer can go on to decide if you are worth the risk.
- Credit utilization rate – Keeping your credit utilization rate low will raise your chances of having new cards approved — it is simple math. If you're using only a small percentage of credit with your existing creditors and you seek an account with a new creditor, they'd rather bring you on with little to no revolving debt. They'd see you as more likely to be able to pay your bills on time and that you're not overextended.
The information we’ve gathered is drawn from a mix of Credit Karma’s in-house data, Credit Boards‘ credit pull database, and data from myFICO® Forums, calculating both the average credit score & the lowest scores typically accepted.
The cards listed are rewards cards that we think offer substantial value for their respective price points, and the scores should provide some insight into what credit scores are needed for a successful credit card application.
One of our favorite travel rewards cards and the best all-round beginners travel card on the market. The Sapphire Preferred has a mid-tier annual fee of only $95. But it packs some premium features like Primary Auto Insurance, Trip Delay, Cancellation, & Interruption Insurances, and earns a valuable 2X points on travel and dining at restaurants. Cardholders also receive a 20% discount on travel redemptions through Chase Ultimate Rewards®; meaning points are worth a minimum 1.25 cents per point for travel.
- Average: 736
- Low: 646
While the Sapphire Reserve signup bonus was reduced by half at the end of March 2017, the card still set’s the benchmark for travel rewards credit cards. It earns 3x points on travel and dining, comes with a complimentary Priority Pass Select membership that allows the cardholder, plus an unlimited number of guests, into the lounge, and has an industry-leading $300 annual travel credit. The Sapphire Reserve attracts a $450 annual fee.
- Average: 776
- Low: 683
Chase’s no-fee rewards credit card that earns an unlimited 1.5 Ultimate Rewards points per dollar. The Freedom Unlimited has quickly become a favorite of the rewards travel scene because of the ability to pair it with the Chase Sapphire Preferred® Card, the Sapphire Reserve, and the Ink Business Preferred℠ Credit Card and transfer points to Chase travel partners.
- Average: 748
- Low: 685
The Southwest Plus Card is one of our favorite co-brand airline credit cards. The card has a welcome bonus of 40,000 points, and an annual fee of only $69, most of which is offset by the 3,000 bonus points on account anniversary.
- Average: 752
- Low: 685
While we searched far and wide for information on the Prestige Card, we couldn’t nail down enough data points to give a reliable average. The majority of approval scores for this $495 annual fee card were in the high 700’s and low 800’s, which makes sense for a premium card commanding a high annual fee. If you have any data points you're willing to share; please let us know in the comments below.
The Arrival Plus maintains a unique position in the travel rewards market, earning miles that can be redeemed for a penny a piece towards any travel purchase of $100 or more. That includes purchases like Airbnb and VRBO, which is rare among travel rewards cards, and handy for travelers that like to get off the beaten path in places such as Southeast Asia.
- Average: 736
- Low: 684
Always a class favorite, the Amex Platinum is one of the leading travel rewards cards in the world with a welcome bonus offer of 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months. (Terms Apply). The card also provides unparalleled lounge access, a mammoth 5x points on airfare purchased directly through the airline or via Amex Travel, and a $200 annual airline credit. The Amex Platinum has a $550 annual fee. Rates & Fees.
- Average: 716
- Low: 643
The one thing that stands out looking at these credit scores is how low some of them are! There is a common misconception that to enter the points and miles game requires an exceptionally high credit score in the high 700’s at least. But, looking at the numbers above. Applicants with credit scores in the mid-to-high 600’s are in with a chance at acquiring some of the most valuable travel rewards credit cards available, provided everything else on the application presents a risk-free prospect to the lender. While we strongly recommend you only focus on top travel rewards cards with FICO scores over 700, you can see it is possible to be approved below that.
If you have any data points that could help others in the AwardWallet community, we would love to hear from you in the comments.
For rates and fees of the cards mentioned in this post, please visit the following links: Barclaycard Arrival Plus® World Elite Mastercard® (See Terms), and The Platinum Card® from American Express (Rates & Fees)
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