Reasons for Rejection of Credit Card Application

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A lender follows a certain process for scrutinizing credit card applications. You are judged on various factors before your application is accepted or rejected. Approved cases are typically informed right away. But, credit card issuers rarely tell you on the spot why your credit card application is rejected. It is important to keep up on the following fronts so that you do not face a problem in getting a credit card.

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  • Poor credit score: Most institutions have a standard credit score rate for considering the creditworthiness of the customer. Usually, a good credit score or CIBIL score would be at least 750. A poor credit score can ruin your chances of credit card application approval.
  • Low income: Your repayment capacity must be satisfactory. You also need to submit income documents to establish your income eligibility. Your application is most likely to be rejected if you do not meet the income requirements of the lender.
  • Occupation: Your occupation and reputation of the company are considered while evaluating your repayment capacity. Unstable work history can also affect your approval chances negatively.

  • Mistakes in the application form: It is common to make an error while filling the application form. Things such as missing crucial information, entering wrong details, etc. lead to a rejected credit card application. It is better to apply for a credit card online since online applications prompt you to fill any mandatory field that has been omitted.
  • Multiple cards or inquiries: You must have a good debt-to-income ratio. If the income outflow is high because of owning multiple credit cards, then the lender will be sceptical of your creditworthiness, leading to a rejection. Also, minimize your credit inquiries because applying for too many credit cards and loans within a short period of time can get your credit card application denied.
  • Location verification: Most lenders make physical verification of your address. Therefore, it is important that nothing goes wrong when the bank’s representative visit your company and the given address is accurate.
  • Age: Credit cards are usually not offered to individuals below 18 and above 60 years of age. If you are too young or too old, chances of credit card application being declined are higher. Moreover, they are generally offered to customers who have a regular source of income.
  • High loan balances: Your application is most likely to be rejected if you haven’t been paying down your loan balances or you’re using too much of your available credit. Reducing your loan balances and using only a portion of the credit available to you can help you get approved.
  • Job consistency: An unstable work history or constant job-hopping may lead to your credit card application being denied. You are more likely to be approved if you have been on your job consistently.

Credit Card issuers send an adverse action letter that gives more details about your application rejection. You must review your credit report for any errors. Resolve errors with the credit bureau if you find any, and repair your credit score before your next credit card application.

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