You’ve applied for a credit card: what happens next?

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Applying for a credit card can be a step towards financial stability and substantial rewards. Not only does having a credit card help build your credit history, but you can also earn valuable rewards towards travel, household expenses and everything in between. Of course, these outcomes are contingent on responsible credit management, so you’ll want to pay your balance off every month and avoid overspending. Once you’ve submitted your credit card application, a series of steps occur before that shiny new card arrives in your mailbox. Here’s everything that happens next:

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The bank runs a credit check

Shortly after receiving your application, the bank runs a credit check and verifies your identity. This step involves assessing your credit history and score to determine your creditworthiness. There are three main credit bureaus the bank might pull from Experian, Equifax and Transunion. Every bank pulls from at least one of these bureaus, though Capital One checks all three. Depending on the type of credit card you’re applying for, your credit score will quickly determine whether the bank will approve you.

Typically, you need a good or excellent credit score to qualify for a travel credit card, defined as 670 or above. You’ll incur a 2-5 point credit score drop per credit inquiry, which can rebound within 1-2 billing cycles if you’re approved and use your new card responsibly. Still, you want to be mindful of the cards you apply for and avoid ones you’re not qualified for.

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How to improve your approval odds

There are a few steps you can take prior to applying for a credit card that may improve your approval odds. Here’s a look at three ways you can achieve this:

Review your credit score ahead of time

To improve the odds of being approved for a credit card, you should review your credit score prior to applying. You can check your credit score for free through annualcreditreport.com. Ensure your credit report doesn’t contain any errors that could negatively impact your score (and your odds of approval for a credit card). Checking your credit score also saves you the hassle of applying for a card that you don’t actually qualify for. The last thing you want is to incur a 2-5 point credit score hit over a card you likely won’t get approved for.

Work on improving your credit score

If the information on your credit report is correct but your score is still low, consider taking steps to improve it before applying for a credit card. One way to do so is to pay your credit card bill on time and in full every month. It’s also important to keep your utilization ratio under 30%. For example, if your total available credit is $5,000, you shouldn’t have a balance over $1,500 at the end of your billing period.

Only apply for cards you qualify for

To improve your odds of approval, only apply for cards you qualify for. If your credit score is in the low 600 range, you probably won’t be approved for a card that requires good to excellent credit. You might want to use your bank’s pre-approval tool to determine which cards you’re likely to qualify for, without a hard credit inquiry.

If your credit score falls in the poor range (300-579), consider applying for a secured credit card. These cards are available to a wider range of consumers with low credit scores. The only requirement is to provide a deposit, which determines your credit line and will be returned to you within 12-18 months of on-time payments. At this point, the bank may also upgrade you to a regular credit card with a higher credit limit, allowing you to build your credit further.

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Your application is evaluated

Once the bank checks your credit and determines your score is sufficient, your application will be further evaluated. Banks take other factors into consideration, including your income, prior relationship with the bank and other factors to determine the likelihood of you repaying your debts. These decisions are often made in a matter of seconds and you’ll either get approved or denied.

Sometimes, the bank may need more time to evaluate your application, which triggers a “needs further review” message on the application results page. If this happens, you should consider calling the bank to see if they need additional information from you. Sometimes, it’s a matter of verifying your identification, which you can do pretty quickly.

Calling the number provided is also a good idea if your application is denied. Sometimes, credit applications are denied over incorrect information on your credit report or because you may have put a freeze on your report and forgotten about it. It’s absolutely worthwhile to call the bank and figure out the exact reason for the denial and try to convince them you’re worthy of a new credit card. Pointing out your longstanding relationship (if any) with the bank and your history of repaying debts can be effective.

Sometimes, the bank won’t approve you for the card you’ve applied for but a downgraded version. For example, if you apply for a Capital One Venture X Rewards Credit Card, the bank may offer you a Venture Card instead, which has similar perks but slightly lower credit requirements. This is certainly not bad news, because you at least have a new credit line to build your history with. Over time, you can demonstrate that you’re a good customer and request your card to be upgraded after a year.

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If approved, your card will be mailed

If your application is approved, your card will be mailed out to the provided address and you’ll receive it within 5-10 business days. The exact timeframe will be listed on the approval page and will vary. Some banks allow you to choose expedited shipping for a fee, and others may include it for free. This is often the case with premium cards like the American Express® Gold Card, which I’ve personally received in the mail within just a couple of days of approval.

Some banks may even provide you with a virtual account number so you can start using your new card right away. This is great for those who need a new credit card for a big purchase. They can start using it immediately to earn points and knock out the spending requirement (more on that later).

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You activate your card

Once your physical card arrives in the mail, you’ll need to activate it before you can use it for purchases. You can typically do this online, through the bank’s mobile app or by calling the number on the back of your card. Sometimes, you’ll be prompted to create a PIN for cash advances. But most of the time, you’ll merely verify the last four digits of the card and some basic account information.

When activating your card online, you’ll be prompted to create an account login if you haven’t already done so. This enables you to easily view your account information online. Be sure to create a secure password according to the guidelines to minimize the chances of account hacking. You may also have to create a security word or provide answers to security questions. These may be used to verify your identity when you call customer service.

Lastly, you might be asked to set up paperless statements. This way, you’ll get your monthly statement and some other communications via email rather than mail. This cuts down on paper waste and is ideal for folks who travel quite a bit and don’t want to miss out on important communications from the bank.

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You complete a spending requirement (if any)

Some credit cards include a welcome bonus tied to a spending requirement that must be completed within a set timeframe. For example, the Chase Sapphire Preferred® Card Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Travel℠. Meanwhile, the American Express Gold Card requires $6,000 in spending within six months to earn 60,000 points.

A great way to complete these spending requirements on time without getting into debt is by setting up autopay for all of your monthly bills. Whether it’s your cell phone, water, electricity or insurance bills – these common household expenses can help you complete credit card spending requirements faster. If you can even prepay your insurance premiums (i.e., for the next six months), that’s also a great way to complete your spending requirements. Just be sure to avoid spending more than you can pay off every month.

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Bottom line

Applying for a credit card can be an intimidating experience, especially if you’re applying or premium credit cards for international travel or other major perks. These cards are incredibly valuable and can provide hundreds (if not thousands) of dollars in perks every year. By understanding the application process and what happens next, you’ll hopefully be less stressed and more excited about the prospect of approval. And if you’re not quite at the credit level needed for approval, hopefully, the tips above can help you get there.

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* Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by Amex Assurance Company.

Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.