The Application
Before a lender approves any sort of loan, line of credit or credit card, you'll be asked to complete an application requesting detailed information - including
where you live, where you work, previous credit experiences, income and more. You can usually complete a credit application by phone, online, in person or by
mail. For the convenience of our customers, HSBC offers Spanish translation of its credit applications.
The Approval Process
Once your information has been received, the lender will review it to determine your eligibility for the credit you have requested. The lender may also obtain a
credit report from a credit reporting agency, where your credit history is kept on file. Both your application and credit history will be examined to determine
if your application is accepted (and credit granted), or declined (and credit denied). You'll usually have the answer in just a couple of days.
If you've been granted credit, we congratulate you. Just remember to use your credit wisely and to borrow only what you need. After all, careful use of your
credit now will determine if you're eligible for future credit.
You'll find tips on managing your credit in the next section. And, if you've been denied credit, read on for ways to fix a poor credit rating.
Managing Credit
It's virtually impossible to avoid debt as you go through life. Paying cash up front for a car, a house or a college education is extremely difficult. The important thing is to know how to manage your debt.
Just be sure to borrow only an amount for which you can afford the monthly payments. And always make at least the monthly minimum payment on time.
If you can't do this, be sure to talk to your creditors and ask about alternate payment options. Work together to develop a mutually agreeable repayment plan. Do whatever you can to avoid having a missed payment on your credit record.
One of the best ways to manage your cash flow - including debts and expenses - is by following a monthly budget. See the following page for instructions and an example of how to create a monthly budget.
Establishing a Credit History
Any time you borrow money - whether via a loan, line of credit, bank or store credit card, mortgage, or the like - it is entered as part of your credit history. If you
don't have a credit history, now is the time to start establishing one. Here are some things you can do:
Obtain a secured card from your bank. This is a normal credit card that can be used up to the amount you have in your savings account.
Obtain a credit card with help from a cosigner (your spouse or your parents).
Apply for a retail or gasoline credit card (these are usually easier to qualify for).
From there, create a debt on your new card and, as your monthly bills come in, be sure to either pay off your balance in full or make at least the minimum monthly payments.
Dealing with Poor Credit
If you're concerned that your debt has had a negative effect on your credit rating, here are some steps you can take to try to improve it:
Contact the national credit bureaus for copies of the information in your credit bureau file. Check for accuracy and, if something is incorrect, have it fixed.
Save up to repay past creditors, whenever possible. A delayed payment reflects better on your credit history than debts not paid at all.
Do not take on additional debt, unless absolutely necessary. And make sure you can afford to make the payments on time.
Do not make purchases on credit solely to rebuild your credit rating. You can obtain a copy of your credit report by contacting the credit reporting agencies in your
Yellow Pages. For your convenience, below are the contact details for the three major credit bureaus:
