Credit Card Application Denials: Common Reasons and How to Address Them

In the fast-paced world we are living in, we need to ensure that we can buy things without any hassle. Looking for new furniture that can go well with your decor? Or maybe you are looking to buy a new laptop to give someone for their birthday; having a credit card removes a lot of the hassle of buying things. While that may be the case, getting approved for a credit card often becomes daunting. 

Reasons Why Your Credit Card Application Might Be Rejected

As we have mentioned above, when you are considering a credit card, you must go through the eligibility criteria before you even start to apply for a credit card. Even if you are eligible to apply for one, there are several reasons for rejection:

  • Bad CIBIL score

When you apply for a credit card, you need to ensure that you have a good credit score. These scores are also known as the CIBIL score, which varies between 300 and 900. In this range, a lower score entails poor debt management from the applicant.

Most banks have a certain qualifying score to provide credit card services to individuals. A good score should be anything above 700. Such a score entails that you are a creditworthy person and are eligible for a credit card service. The common reason for a bad credit score is you purchased something on EMI where your payments were not seamless and timely.

  • Poor Income

Among many other reasons for rejection, poor income is one of the contributing factors. There are different thresholds of qualifying income based on the bank you have applied to for a credit card. You must submit the salary slips and the tax returns to prove to the bank that you have enough income. Even though it depends on whether the issuer finds an applicant eligible, it is beneficial to do your own research. 

  • Inconsistent Work History

While it may not seem obvious, how consistent you are with your jobs contributes to your credit card approval. If you are one of those individuals who have gone through a lot of jobs in a short span of time and missed a few months of pay, more likely your application might get rejected. The providing authority might feel like such a reason could lead to irregular payments, so they might consider you ineligible.

  • Credit History

You need some credit history to show the banks your debt management capabilities. Without a credit history, it would be difficult for the institutions to confirm if you are an eligible candidate.

  • Precise Information

When considering applying for a credit card, you need to understand that any wrong or backdated information will lead to a direct rejection of your application form.

How To Make Sure You Get Approved the Next Time

While you cannot go back and mend things, you certainly can ensure you get approved the next time. Here are the following steps that will ensure the approval of your application:

  • Consider using your existing credit cards appropriately. First, you need to ensure you are punctual with your payments. The issuer of your upcoming credit card will be inclined to approve you if you show a history of timely payments.
  • Creating a healthy CIBIL score will aid you on your journey to a new credit card application and help you with your future financial goals. Therefore, consider remedying your poor credit score.
  • Timing is the key for credit card applications. The ideal time to apply for a credit card is when you are free of any risks and financially ready.
  • Consider doing deep research when you are looking for a credit card issuer. You need to make sure the option you choose meets your spending habits and budget.

Wrapping Up

Acknowledging the tips above, you can ensure your next application is not rejected. Additionally, a good CIBIL score will help you when you want to get a loan.

Interesting Related Article: “Common Reasons Loans Are Rejected