As a retail giant with a loyal customer base of over 240 million weekly shoppers globally, Walmart is no stranger to the world of consumer credit. The company‘s flagship store credit card, issued by Capital One, aims to reward frequent Walmart shoppers with exclusive benefits and cashback rewards. But for those considering applying for the card, one key question often arises: what credit bureau does Walmart use to evaluate potential cardholders?
In this comprehensive guide, we‘ll dive deep into the nuts and bolts of Walmart‘s credit card approval process, from the credit score requirements to the specific bureaus Capital One pulls from. We‘ll also explore how the Walmart Rewards card stacks up against other retail credit cards and share expert tips for using it strategically to build credit.
Whether you‘re a die-hard Walmart fan or just a savvy shopper looking to maximize your spending power, read on for everything you need to know about Walmart‘s credit card partnership with Capital One.
Inside the Walmart-Capital One Credit Card Partnership
In September 2019, Walmart announced that it would be shifting its credit card portfolio from Synchrony Bank to Capital One, ending a nearly 20-year partnership. The move came as part of Walmart‘s broader push to revamp its financial services offerings and drive deeper customer loyalty.
Under the new agreement, Capital One issues two co-branded Walmart credit cards:
- The Capital One Walmart Rewards Card, an open-loop card that can be used anywhere Mastercard is accepted
- The Walmart Credit Card, a closed-loop card that can only be used at Walmart stores and Walmart.com
Both cards offer tiered cashback rewards, with the highest earn rates reserved for online Walmart purchases. Here‘s a closer look at the rewards structure for the Walmart Rewards Card:
- 5% cash back at Walmart.com, including pickup and delivery
- 2% cash back on in-store purchases at Walmart (including Murphy USA and Walmart fuel stations)
- 2% cash back on restaurants and travel
- 1% cash back everywhere else
These rewards are competitive with other big-name store cards like Target‘s RedCard and the Amazon Prime Rewards Visa. However, it‘s worth noting that Walmart‘s previous credit card issuer, Synchrony Bank, offered a similar 3-2-1 cashback program, so the revamp may not feel like a major upgrade for existing cardholders.
The biggest differentiator with the Capital One Walmart Rewards Card is the ability to earn bonus cashback on online Walmart purchases. This aligns with Walmart‘s strategic focus on ecommerce growth and its efforts to chase market share from online retail behemoth Amazon.
In Q4 2020, Walmart saw its ecommerce sales jump 69% year-over-year, buoyed by pandemic-driven online shopping trends. By incentivizing cardholders to shop online, Walmart aims to capture a larger slice of the booming ecommerce market and drive long-term digital sales growth.
What Credit Bureau Does Capital One Use for the Walmart Card?
Now, let‘s tackle the question at the heart of this article: what credit bureau does Capital One use to evaluate Walmart credit card applications?
The short answer is that Capital One pulls credit reports from all three major U.S. credit bureaus – Equifax, Experian, and TransUnion. However, the bank‘s underwriting process is a bit more nuanced than that.
According to credit card industry analysts, Capital One uses a multi-bureau credit pulling strategy for most of its credit card products, including the Walmart Rewards Card. This means that rather than relying on a single credit report, Capital One will typically pull reports from at least two of the three major bureaus when evaluating an application.
The exact bureaus Capital One pulls from can vary by applicant and by credit card product. In some cases, the bank may even pull from all three bureaus if additional verification is needed.
This multi-bureau approach is designed to give Capital One a more comprehensive view of an applicant‘s credit history and risk profile. By cross-referencing data from multiple sources, the bank can get a clearer picture of a potential cardholder‘s creditworthiness and make more accurate approval decisions.
However, this strategy can also work against some applicants. Each hard credit pull can ding your credit score by a few points, so if Capital One pulls from multiple bureaus, the impact on your score may be more significant. This is why it‘s generally a good idea to check for pre-qualification before formally applying for a credit card.
Qualifying for the Walmart Credit Card: What It Takes
As we mentioned earlier, the Walmart Rewards Card typically requires a good to excellent credit score for approval, which translates to a FICO score of at least 670. However, that‘s just one piece of the puzzle.
Capital One also looks at a range of other financial factors when evaluating credit card applications, including:
- Income: Applicants must have sufficient income to pay their monthly bills and manage a new line of credit. Capital One typically requires a minimum annual income of $12,000 for its credit cards.
- Debt-to-income ratio: This metric compares an applicant‘s monthly debt payments to their monthly income. A high debt-to-income ratio can be a red flag for lenders, as it suggests the applicant may struggle to take on additional debt.
- Employment status: Capital One favors applicants with stable employment, as this suggests a steady income stream to pay off credit card balances.
- Housing situation: Whether an applicant rents or owns their home can impact their perceived financial stability and ability to repay debt.
- Recent credit inquiries: Multiple credit applications in a short time frame can be a red flag for lenders, as it may signal financial distress or a high appetite for debt.
Beyond these general underwriting criteria, Capital One is known for using alternative data sources and machine learning to evaluate creditworthiness. For example, the bank might look at an applicant‘s educational background, occupation, or even their social media activity to get a more holistic view of their financial health.
According to a 2019 study by Experian, 65% of lenders are now using alternative data to make credit decisions. This can be especially helpful for younger consumers or those with limited traditional credit histories, as it gives lenders more data points to work with.
Of course, no underwriting model is perfect, and there‘s always some element of unpredictability when it comes to credit card approvals. But by understanding Capital One‘s general criteria for the Walmart card, you can get a better sense of your odds of qualifying.
Building Credit with the Walmart Rewards Card: Expert Tips
For many consumers, a store credit card like the Walmart Rewards Card can be a useful tool for building or rebuilding credit. When used responsibly, these cards can help you establish a positive payment history and improve your credit mix, two key factors in your FICO score.
However, there are also some potential downsides to be aware of. Retail credit cards tend to come with higher APRs than general rewards cards, and they often have lower credit limits as well. This can make it easier to max out your card and drive up your credit utilization ratio, which can hurt your score.
To use the Walmart Rewards Card effectively as a credit-building tool, consider these expert tips:
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Always pay your bill on time. Payment history is the single biggest factor in your FICO score, accounting for 35% of the scoring model. Set up automatic payments or reminders to ensure you never miss a due date.
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Keep your balance low. Credit utilization, or the amount of credit you‘re using compared to your credit limit, is another major factor in your credit score. Aim to use no more than 30% of your available credit at any given time.
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Don‘t apply for too many cards at once. Each credit card application results in a hard inquiry on your credit report, which can ding your score. Avoid applying for multiple cards in a short timeframe, as this can signal financial risk to lenders.
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Use your card regularly, but not excessively. Demonstrating consistent, responsible use of your Walmart card can help you build a positive payment history over time. Just be sure to pay off your balance in full each month to avoid accruing interest.
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Keep your account open and in good standing. The longer you hold your Walmart card, the more it will help your credit score by increasing your average account age. Avoid closing your account unless absolutely necessary.
By following these guidelines and using your Walmart Rewards Card strategically, you can leverage this store card to improve your credit profile and open up new financial opportunities down the line.
The Bottom Line: Is the Walmart Credit Card Right for You?
Like any financial product, the Capital One Walmart Rewards Card has its pros and cons. For frequent Walmart shoppers with good to excellent credit, the card can offer solid rewards and a way to build credit with the world‘s largest retailer. However, those with lower credit scores or limited Walmart spend may find better options elsewhere.
Ultimately, the decision to apply for a Walmart credit card (or any store card) should be based on your individual financial situation and goals. If you‘re confident you can manage your spending and pay off your balance in full each month, the Walmart card can be a rewarding addition to your wallet. But if you‘re prone to overspending or carrying a balance, you may be better off with a more general rewards card with a lower APR.
Regardless of which route you choose, knowledge is power when it comes to credit. By understanding how Walmart and Capital One evaluate applicants and what it takes to use credit responsibly, you can make more informed decisions and avoid potential pitfalls. Armed with this knowledge, you‘ll be well on your way to achieving your financial goals – one swipe at a time.
