Many of us would have applied for credit card, and at times, it doesn’t get through. This article is all about the possible reasons as to why the application was rejected.
Errors in the application form
For the application to get accepted, it is very important to review the form before submission. Minor or multiple mistakes could amount to a rejection. Furnishing an error-free application is mandatory for the application to be considered and approved.
Occupation could have an impact on application approval. Having a stable job and working in a reputed organisation plays a vital role. Choice of profession and consistency of the work is also considered for the rejection or the acceptance of the application. Having a job with no steady source of income would work against the applicants.
Credit card balances are too high
The lenders see if you are using a portion of the available credit or the whole of it. Using too much of the available credit can amount to the rejection of the credit card application. The applicant’s debt-to-income ratio is measured. It is a ratio where the outstanding balance is measured against your available credit limit. It is advised to have your balances below 30% for a better credit score and the application to get through.
Too many inquiries on your credit report
Whether the application for the credit card has been approved or not, the application of too many loans or credit cards within a short period can amount to a rejection of the credit card applied. There is no limit specified for the application of a credit card, but it is better to apply for only one card at a time.
This is a compulsory norm followed by the bank before issuing the credit card. Applicant should fill the precise details of the address with adequate address proof. A discrepancy in the address would automatically amount to the rejection of the application.
The applicant should be of legal age at the time of application. If the age of the applicant is below 18 years, the lender will not accept it. Such individuals would have to get an add-on credit card with their parents or elder siblings to meet their credit requirements if any.
Customer’s line of credit gets extended by the bank or any other financial institutions in case of income from other sources. In case of failure of the amount due within the specified time, the banks earn enough interest. In case of low income or unstable employment, the bank rejects the application as the individual may not afford to take up debts in the future.
The above mentioned could be the possible reasons for the rejection of a credit card application. It is better to have these points verified before applying for a credit card.