Reasons Why Your Credit Card Application Is Turned down?

It might be disappointing to have your credit card application rejected, but you shouldn’t take it personally. There are different reasons why credit card issuers reject applications, and knowing the reasons that relate to your specific circumstances will help you to take the right moves to get accepted the next time you apply for a credit card.

You will know the actual reason why your credit card application was rejected in the adverse action letter. The letter will also include instructions for obtaining a free copy of your credit report if one was taken into account while making the decision. While you wait for your letter, here are some potential reasons why your credit card application can be rejected.

You don’t have much Credit history

It might be difficult to get accepted for some credit cards if you have little or no credit history. Even though it doesn’t seem fair, you cannot build credit without being authorized for and make use of credit accounts, and this issue becomes difficult for lenders.

A lack of credit history does not indicate that you are not trustable. Thus this indicates that the card issuer does not have enough information about your credit management to determine whether you would be a trusted customer or not.

Having a history of late payments

Your payment history comprises a significant portion of your CIBIL Score, so if you’ve ever been late for even one payment by more than 30 days, it might damage your credit score and this may get difficult for you to get accepted for certain credit cards.

Unfortunately, you cannot get rid of late payments until and unless the information is incorrect. While you try to restore your credit, you may still be able to obtain some secured credit cards and other cards for those with weak or fair credit.

Having high debt

It might be more difficult to make all of your monthly payments as your debt increases. And credit card companies prefer on-time payments, having too much debt with your salary will reduce your chances of receiving a new credit card.

Overall If you have a significant credit card balance or a lot of debt payments, consider paying off current credit cards in full before applying for a new credit card.

Your recent Credit Inquiries are high

Your credit score is not affected by each new hard inquiry on your credit report. But if you have several credit inquiries in a short period that haven’t been done to compare rates on a mortgage, auto loan, or student loan, it may be a sign that you’re finding it difficult to manage your money even when you don't have any debt.

Conclusion

Most of the above-listed causes can result in the rejection of credit card applications. You must read the terms and conditions before submitting the application because credit card companies do not reveal the reason for rejecting an application. Rejection is never enjoyable. But you may always try again. However, don’t keep doing the same thing and predict a different outcome. Make sure you fulfill the credit card’s conditions, have a strong credit score, and a steady source of income, and submit an error-free application.

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