What To Do If Your Credit Card Application Is Denied
Reasons Your Application May Be Rejected
You May Have Limited Credit History
Though some credit cards will approve applicants with a short credit history, many issuers like to see a steady track record before offering approval on their most popular cards. Even if you’re a very responsible customer, you simply might not have a long enough credit history to qualify. If that’s the case, continue paying your bill on time and making other smart credit choices to continue building (and lengthening) credit.
You May Have a Low Credit Score
Each credit card has a different threshold for the creditworthiness required. Generally speaking, more premium cards require excellent credit, though there’s no hard and fast rule.
In some cases, you may see vague references to the level of required credit on application forms. If you see score descriptors, you can use these FICO categories to help you determine if you’re a good candidate for that card.
Remember, numerous factors go into calculating your FICO score. A history of late payments—or not paying your card at all—is a major factor, as is consistently maxing out your cards or having a high utilization rate.
You May Have Too Many Credit Accounts
Another common reason for an application being denied is having too many new accounts opened in a short amount of time. Some issuers have explicit rules on how many cards they think is reasonable; one well-known one is the Chase “5/24” Rule. This rule discourages customers from applying if they’ve opened five or more accounts in the past 24 months since it’s often an automatic rejection.
You May Have a Poor Track Record With the Issuer
If you’re applying for a new card with an issuer you’ve previously had (or currently have) an account with, they will consider your history as a client as part of their decision.
Customers who previously closed cards shortly after opening them or customers who apply for cards and then never use them aren’t highly profitable to the bank. And, if the issuer suspects you’re “gaming the system”—earning rewards through manipulative methods—they may temporarily or permanently deny you new cards.
Your Income May Be Too Low
Nearly all credit card applications require you to list your current income. That’s because it’s a key consideration when deciding whether or not you’ll be approved. Card issuers don’t want to take on a customer who may be at risk for taking on too much debt in relation to their income.
A low income doesn’t necessarily mean your application will be denied, though, especially if you have no other loans and a reasonable monthly housing payment. In the same vein, a high income won’t guarantee approval if you have numerous ongoing financial obligations. The number of existing credit accounts—and their associated credit limits—are also considered in relation to your income.
If your income has recently increased due to a new job or other changing circumstances, you may need to wait a few months before the card issuer classifies it as stable income.
You May Have an Error on Your Credit Report
If you think you’re the perfect candidate but were denied anyway, it’s possible there is an error on your credit report. You can get a free copy of your credit report to look it over and see if something was misreported. Sample errors include accounts inaccurately described as being late, incorrect balances or accounts mislabeled as being open or closed. Review your credit report thoroughly and dispute credit report errors if needed.
Source By: forbes