Credit Repair

10 Possible Reasons Why Credit Card Applications May Get Denied

Are you having difficulty in getting your credit card applications approved and wondering where the problem is? The main problem is possibly with your credit score and history, but there can be other reasons as well. Companies usually do not give any explanations on the spot on why they are rejecting an application. It is only after you receive an adverse action letter from them within seven to ten days after the submission date of your application when you get to know the actual cause of rejection. Following is a brief rundown on some of the possible reasons.

You Have A Poor Credit History

If you have no or very little experience with credit, you risk being denied. It is important for you to keep in mind that FICO does not even generate a score if there have been no active credit accounts in your name in the past six months. If you have no or very poor credit score, your credit card applications are likely to be denied.

There Is A Recent Collection Record On Your Credit Report

One of the top-most things in the hate-list of credit card companies is a collection record in the credit reports of applicants. These are very negative items on a credit report that substantially damage FICO score of an individual. Collection records are taken as a sign of your irresponsible behavior that you have not been very good in meeting your financial obligations.

Charge-Off On Credit Report

Likewise, applicants with a charge-off on their credit reports are also likely to be denied. Charge-off refers to an outstanding balance on one of your credit cards that you did not pay off in fill in even over six months of time. The rejection is quite obvious; after all, why would a company offer you another card while you are not paying the balances on your existing cards?

Your Credit Report Says You Have Made Too Many Enquiries Off Late

Making too many enquiries for loans or credit cards also has a negative impact on your credit report that results in a reduced FICO score. Therefore, even large number of enquiries or applications (no matter whether you get approved or rejected) may also become a reason for rejection of credit card applications.

The Number Of Credit Cards You Own Is Already Very High

If you already have too many credit cards, your application is less likely to be approved. However, there are no specific provisions regarding how many credit cards a person can have. It is entirely up to the company to make a final decision about it.

You Already Owe A Lot On Your Existing Loans

If the outstanding balances on your existing loans are already very high, companies will hesitate issuing you a credit card due to the fear that you may not be able to pay off your credit card balances with your current income.

You Do Not Meet The Minimum Age Requirement

Credit card applications are usually denied if the applicants are below 18 years of age. For some companies, the minimum age required is 21 unless the applicant has a co-signer or has a decent regular monthly income. However, there can be certain exceptions also. For example, underage applicants may also be sometimes accepted if their parents have already included them on their credit cards as authorized users.

Your Regular Monthly Income Do Not Meet The Minimum Eligibility Criteria

Another possibility is that your income is too low. Here, it is important to note that the requirement for the minimum income limit varies from one company to another. But, the problem is that companies rarely publish such requirements. Therefore, it is entirely up to you to decide by doing your research which credit card really fits your income.

You Have Unstable Employment Record

Unstable employment record can also be a possible reason why credit card applications may get rejected. Therefore, people who have been on their job consistently, with several years of work experience, easily get approved. Even a gap of couple of months between two jobs may work against you.

Your Application Form Was Not Filled Out Properly

If you miss to fill out some necessary columns in the application form, your application is very much likely to be denied. This reason might be possible if you are filling out the forms on paper. When you apply online, this risk can significantly be eliminated because you usually cannot submit an online application unless you have filled out all mandatory columns. If you try to click on the submit button without filling out some important details, you will receive an error that specific columns are blank and that you must fill them out.

If any of the above reasons apply to you, you are recommended to first work on to improve your situation before sending credit card applications because rejections will only worsen your FICO score.


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One Response to “10 Possible Reasons Why Credit Card Applications May Get Denied”

  1. Dennis says:

    An American can not imagine his/ her life without credit cards. Having multiple credit cards in your wallets has become a fashion trend today. In this way, the article has done a great job by telling some possible reasons of rejection of credit card applications. If the application form has not filled up properly, it will be rejected definitely. If you are filing the application form manually, make sure that all the details are duly filled properly. Minimum age limit is also very important factor. Credit card can not be issued below 16. If you already have multiple credit cards, it is quite possible that your application may be rejected. Monthly income and a consistent employment history also play a crucial role in having a credit card. If you already have multiple loans, your application may be rejected because the company must have to think about the repayment status also and with so much loans, it will be difficult for you to pay back. If you have no credit history, there is a big chance of rejection and if you have a credit history with a collection record or charge off record which reflects your financial irresponsibility

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