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Credit card eligibility explained

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So you’ve been browsing (and comparing) credit cards and finally found the right one for you. There’s just one problem: you’re not exactly sure if you’re eligible to apply for your chosen rewards credit card.

In most situations, credit card eligibility depends on a combination of your credit score and income, but there are also other approval factors worth reading up about in more detail.


The top 7 credit card eligibility factors

1. Credit score

Credit card eligibility is largely based on your credit score. Generally speaking, you’ll need at least a good credit score (minimum 660) to even be considered eligible for most credit cards and a great credit score (at least 725) for some higher-tier rewards credit cards.

Your credit score serves as an overall assessment of how well you’ve managed credit and borrowed money in the past – based on a range starting from 300 out of a possible 900. And as a rule of thumb, the closer your score is to 900, the better your odds are of getting approved.

With a poor credit score (below 559), you’ll be ruled out of getting most conventional credit cards. However, you can still be eligible for secured credit cards, which are extremely easy to get in exchange for providing a deposit and can help gradually improve your credit score when used responsibly.

Your credit score is determined by the following key factors:

Payment history: the single most important credit score factor, payment history is an assessment of how reliably you make at least the minimum payment on time on your loans and any borrowed money you owe.

Amount owed: also referred to as credit utilization, this factor measures how much you borrow relative to your total credit limit. Banks and lenders prefer you use up only a small percentage of your total credit limit (ideally, below 30%), as regularly carrying a large balance relative to your limit is often flagged as a sign you may be overleveraged or overreliant on debt.

Length of credit history: this one is self-explanatory; the longer your experience with properly managing credit, the better. It’s one of the reasons why many experts suggest you should avoid cancelling the first credit card you’ve ever opened.

New inquiries: recent credit applications (also known as hard pulls) can temporarily ding your score, which is why you should ideally spread out applications for new credit over a span of several months rather than haphazardly applying for multiple accounts in a short period of time.

Public records: instances of bankruptcy, liens, lawsuits, or other publicly cited legal liabilities can impact your credit history and suggest to banks you’re a higher risk borrower.

Types of credit: general speaking, banks and lenders like to see you have experience managing multiple types of credit accounts (like loans, credit cards, and mortgages). However, this is only a minor credit score factor and you shouldn’t unnecessarily open new accounts you don’t need just to chase a higher score. Factors like your payment history and amount owed are by far the most critical factors that go into calculating your credit score.

For most people, if you have a history of paying your bills on time and don’t carry too much debt, you’ll have a good credit score. 

If you know you have a good credit score and end up being declined for a new credit application, don’t freak out. Sometimes lenders take into account additional factors (some of which are covered below), may need additional information, have the wrong information about you, or there was an inaccuracy included on your application form. So give them a call if you suspect something isn’t right.

Find your perfect credit card in under 60 seconds - No SIN required

  1. Tell us a bit about yourself

    Answer some questions so we can personalize our recommendations - this won't impact your credit score

  2. Check your eligibility

    We confirm your eligibility with our partner, TransUnion. This will be a ‘soft credit check’ which you can see but lenders cannot

  3. Find your perfect matches

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2. Income and employment

When applying for a credit card, you’ll usually have to provide your income and employment information. Banks aren’t doing this to be nosy, they want proof you earn a steady and sufficient-enough income to pay back at least a portion of your credit card balance every month.

Depending on the credit card, you may or may not need to earn a specific minimum income as an application requirement (if there is one, like say at least $60,000 annually, banks will usually highlight the requirement upfront). In either case though, your income will directly factor into your eligibility.

All that said, while having a job plays a critical role in your eligibility, it’s not technically a prerequisite for getting a credit card. For instance, If you’re not currently employed or are a full-time student, providing proof you have access to at least some form of regular income (like a family allowance or scholarship) could be enough. Just note, in such instances, you may need to provide additional documentation, application processing times may take slightly longer, and you may only be considered for some entry-level credit cards.

Additionally, some card issuers have more lenient eligibility requirements when it comes to employment status (retail rewards credit cards, for instance, are notoriously easier to get approved for).

If your sole reason for getting a credit card is to build credit rather than earn travel points or cash back, you could also opt for a secured credit card. 

3. Residency status

As a basic eligibility requirement, most credit cards require you to be a Canadian resident or citizen. 

If you’re a new immigrant or have temporary residence status, like a work permit, your choice of credit cards may be significantly more limited.

The good news is many of the big banks offer programs designed for new immigrants, like BMO’s New Start Program or Scotia’s StraightRight Program, which make it easier to get approved for select credit cards without permanent residency status provided you have some form of employment and a steady source of income. You can also opt for a secured card as a way to build your Canadian credit history and upgrade to an unsecured card at a later point in time.

4. Credit rating

Aside from just checking your three-digit credit score, many banks will pull your credit report to get a read on your credit rating.

A credit rating is a code consisting of both a letter and a number (e.g. R1 or M1) and provides insight into how you’ve managed individual credit accounts. The letter in a credit rating represents the type of credit or loan (i.e. “R” stands for revolving credit like a credit card and “M” stands for mortgage). Meanwhile, the number represents a sliding scale from 1 – 9 that scores how often you make payments on time (i.e. 1 is the best rating possible and indicates payments are made on time, while the number 9 is the worst rating and reflects the account is in collections or bankruptcy). 

You can find a credit rating next to each account you’ve opened in your credit report. 

Think of your three-digit credit score as an overall assessment of your creditworthiness and your credit rating as an individual evaluation on a per-account basis. 

As you can imagine, credit scores and credit ratings closely feed into each other. For instance, if you make a late payment of more than 60 days on your credit card, an R3 will appear next to the account and your overall credit score will decrease too.

5. History of bankruptcy 

Filing for bankruptcy or defaulting on a revolving line of credit is a matter of public record and will usually result in an R9 rating in your credit report. 

With an R9 on your record, you’ll be ruled out of getting virtually any type of conventional credit card. In fact, most banks will explicitly ask if you’ve filed for bankruptcy within the past seven years upfront before even proceeding with the credit card application.

The good news is an R9 won’t remain on your credit report forever and can usually be stricken from your record in 6 or 7 years from the date of discharge. Note though, if you’ve filed for bankruptcy more than once or you haven’t taken any meaningful steps to settle your debt, the R9 rating could linger on your credit report for several more years.

Along with filing for a consumer proposal and going to credit counselling, another step you can take to rebuild your credit after an R9 is to get a secured credit card. 

6. Age

According to Canadian law, no one under the age of 18 is eligible to apply for a credit card in their own name. You must be what’s known as the age of majority, or in layman’s terms, legally an adult. 

The age of majority is either 18 or 19 years old depending on which province you live in.

  • 18 years old: Alberta, Ontario, Quebec, Manitoba, Saskatchewan, and Prince Edwards Island
  • 19 years old: British Columbia, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, and Yukon

7. Underwriting

Each bank tends to have its own process when it comes to evaluating the eligibility and risk of credit card applicants – known as the underwriting process. A lot of the underwriting process happens behind the scenes and can vary from bank-to-bank and even from card-to-card, as some risk factors are given more weight than others. 

In some cases, factors like the number of credit cards you’ve recently opened or the total number of credit cards you have on your file may play a role. In other cases, banks may adjust their underwriting in response to changes in the economy or an internal shift in company goals. As with anything related to the underwriting process, it’s hard to pinpoint specifics.

Also read:

Find your perfect credit card in under 60 seconds - No SIN required

  1. Tell us a bit about yourself

    Answer some questions so we can personalize our recommendations - this won't impact your credit score

  2. Check your eligibility

    We confirm your eligibility with our partner, TransUnion. This will be a ‘soft credit check’ which you can see but lenders cannot

  3. Find your perfect matches

    We show you the cards you’re most likely to want and most likely to get

let's get started