Being a member of Costco, a warehouse club selling a large assortment of discounted products, is the first condition that qualifies you for the American Express True Earnings credit card. The second is a strong credit history. Besides giving you a line of credit, the no-annual-fee account offers cash rebates and rewards.
Required Credit Score
When you submit a credit card application, the financial institution receiving it orders a report from a credit bureau. Besides disclosing your borrowing and payment history, most bureaus give you a score based on the FICO scale that ranges from 300 to 850 points. Approval for the True Earnings credit card requires a minimum score of 750, which is considered excellent.
The FICO scale is named after its creator, the Fair Isaac Corporation, and it's used to measure your creditworthiness based on information creditors provide the credit bureaus. Your history is updated monthly and your score can fall, rise or stay the same depending on what it reveals about your propensity to acquire debts and your ability to repay them.
FICO and Credit Approval
The higher your FICO score, the more likely you are to be approved for a line of credit with the lowest interest rates available. Although the True Earnings credit card requires 750 points, a lower score doesn’t have to shut you out forever. You can increase it by paying your bills early or on the due date consistently. Lowering the balance and paying off your credit card debt also improves your credit score.
FICO Score Breakdown
Although lenders may use a different rating system to score your credit history, most rely on the FICO scale. According to that system, your payment history represents 35 percent of your score and your debt is 30 percent. The length of your credit history makes up 15 percent of your score, and other miscellaneous factors amount to 10 percent. A final 10 percent may be determined by a new credit line, but a recently started credit history might also weigh negatively on the scale, lowering your points. Once a year you are entitled to a free copy of your debt and payment history from the credit bureaus, but the report doesn’t include your score. To find out whether you meet the 750-point requirement for the True Earnings credit card before applying for it, you’ll have to pay the credit bureaus for the information.
- Hemera Technologies/PhotoObjects.net/Getty Images