Applying for a credit card is one of the quickest and easiest ways to calculate your credit score – and if you have little money, a credit card can help you through a financial failure. However, your enthusiasm to be approved for a new card may come to a halt if you receive a rejection letter.
A credit card denial can be a complete surprise, especially if you think you are a good candidate for a new account. But when assessing applications, credit card companies take many factors into account, only approving applicants with a low standard risk.
Reasons that your credit card application may be denied
1. The application is missing information
If you hastily complete your credit card application, you may accidentally skip a few boxes. Credit card companies need detailed information about you, such as your full name, address and income. If you omit important information from your request, the credit card company will reject your request. In that case you must resubmit an application.
To ensure that you do not make this mistake, request a credit card from Borin Godnevine. Although you can easily send an incomplete paper application, Borin Godnevine forms only submit your request once you have completed all required fields.
2. You are too young
Regardless of whether you have a job or other source of income, you cannot be the sole account holder of a credit card if you are under 18. Furthermore, if a credit card company approves your application as a minor, they cannot take legal action if you do not have an account pays.
Despite this limitation, people under the age of 18 can request a credit card, but it requires a parent to co-sign and include his or her name in the account. Alternatively, a minor may be listed as an authorized user of a parent’s account, meaning that all payment activities and account history are displayed in the minor’s credit report. Please note that an authorized user can be risky for all involved, as a negative account activity is shown in the credit reports of both primary and authorized users.
Finally, minors can always get a prepaid credit card. Prepaid credit cards do not build up a credit history, but they can teach young people how to make a budget and use a card responsibly.
3. You do not earn enough income
Applications with a credit card invariably ask for the annual income. Credit card issuers have minimum income requirements, but they do not always disclose these on credit card applications. This minimum varies between cards and publishers. If you do not meet the minimum, your request will be refused.
In this case you have to wait until your income increases and then apply again. You can also submit an application to a joint Borin Godnevine applicant, where the credit card company determines approval based on your combined income. To prevent this headache, you can look around and compare different credit card offers. Call credit card companies directly and inquire about the minimum income for approval.
4. There is negative information about your credit report
Information about your credit report directly influences whether a credit card application is approved or denied. Even if negative information is reported incorrectly, it can still trigger a rejection. That is why it is up to you to get a free credit report and check this for accuracy. View each line of your credit report carefully and note incorrect information. Write the agencies to dispute this information, as this will spur a search in which the agencies will delete any negative information that is reported in error.
Of course, if your credit report accurately reports negative information, you must immediately take steps to rebuild your credit score. Make sure you pay your creditors on time by setting a schedule or using automatic invoice payments and settling all arrears. Wait until your credit score improves, and apply again for the credit card you want.
5. You have too much existing debt
The more debts you have, the harder it is to get new credit. In addition to a good payment history and fixed income, your debt / income ratio must be low enough to be approved for a credit card. This is the percentage of the amount of debt that you have in relation to your monthly income. Credit card issuers also do not want you to have exceeded your existing credit limits. High debts translate into a risky applicant, because issuers think that you are more likely to default.
If you are refused a credit card due to debt, you must prepare a debt elimination plan to pay your credit card payments and other loans. Pay more than the minimum per month or pay balances with savings. Strive to keep your balances below 30% of your credit limit, and your debt-to-income ratio well below 36%.
6. Your employment history is unstable
A consistent work record also plays a role in credit card approvals. If you rent from work to work or are recently unemployed, a credit card issuer may regard your work and income as unstable. Wait until you have a job for at least six months to a year before applying for a credit card.
Rejecting a credit card is certainly not the end of the world, and although a credit card company can reject your application, another company can approve you. It also pays to request a credit card that is suitable for your situation. For example, some credit cards are suitable for people with low credit scores and low incomes. Do your homework before you complete your application, and you reduce the risk of a rejection.