Are you wondering why your credit card application was denied? Don’t expect the card issuer to call you and explain the reasons for the refusal. Let us tell you the possible reasons behind the rejection of your credit card application:
Shaky credit score
Being lazy when it comes to credit card repayment has serious ramifications. Delay in bill payment directly impacts your credit score leading to a bad credit history.
Being credit hungry
Card issuers assess the applicant’s risk-perception as well. The following actions show us as a “risky” customer and are therefore best avoided:
a. Too many loans
Having too many loans in your name can lead to rejection of your credit card application. In such a scenario, banks are unsure of your repayment capability as your finances are already stretched thin.
b. Applying for many credit cards simultaneously
Multiple credit card applications depict your desperation to avail a card. It may make an issuer doubtful of your repayment capability.
c. High credit card usage
High usage of a credit card means you tend to exhaust your credit limit swiftly and are not financially stable. Similarly, using multiple credit cards for up to 50% of their combined credit limit can impact your credit score.
Incorrect credit report
There are times when credit reports reflect debt that you have already paid off. Check your report thoroughly for any such inaccuracies as they can drag down your score. Contact CIBIL to get your report corrected.
Mistakes when filling the application
Filling the application form with false or incomplete information is another reason for credit card rejection. We suggest you spend time on your application form and double check all your entries to avoid mistakes.
Surprisingly, your area of residence or location of your office can also be one of the factors you are not getting a credit card. Banks maintain a record of blacklist areas where they do not extend their services, it could be that your location falls in that list.
If you don’t meet the minimum income requirement stated by the card issuer, your application may be rejected. Search for cards that are aligned to your income bracket rather than looking for cards whose eligibility criterion you cannot meet.