There is no doubt that a credit card is the key source of finance which really helps you to realize your desires. A credit, certainly, does offer much-needed support to tide over the financial issues. However, at times, you have to come across a situation when your credit card application gets rejected. Your credit card application undergoes various checks before it gets approved or rejected. So, allow me to share 7 reasons due to which your credit card application can be rejected.
Poor Credit History
This is one of the key reasons your credit card application can be rejected. Every bank checks your credit history i.e. CIBIL reports before approving your application. In case you have defaulted more than once on your repayments of any type of credit such as credit card or loan, then the bank will reject your application straightaway.
If you want to maintain a high credit score, you have to do the following things –
- Make sure you have avoided too many enquirers.
- Make sure you pay all your dues on time.
- Avoid taking too many unsecured loans such as credit cards or personal loans.
- Avoid using full credit limit. Ideally, you should use 70% only.
No Credit History
Not having a credit history is also one of key reasons owing to which your credit card application can be rejected. It means if you have never taken a loan or credit card, chances are you may be rejected by your bank or card issuer. If you have never taken any type of credit, you won’t be having any record with CIBIL. Banks and lenders consider this case as risky as there is no proof of your credit repayment behavior.
Are you wondering how you are going to build a credit score when everybody is reluctant of giving you credit because you lack one? Well, in this case, you can apply for a secured credit card. Your bank will give you a secured credit card against the security of a Fixed Deposit. Once you have a secured credit card, it is important you have used it responsibly and then apply for a regular credit card.
While your bank authenticates documents, related to your income, needed for eligibility calculation, they also check your bank accounts to have a better idea of your banking behavior. In case your cheques are getting bounced, salary is not getting credited timely, and there is also insufficient balance, then your bank or lender can deny your credit card application. If you are doing a job then bank statement of your last six months salary account is required and if you are self-employed, than twelve months. Make sure there are no minimum balance charges and inward cheque returns in your bank statement.
If you have a past of frequently changing your jobs, then also your credit card application can be rejected. Your bank and lenders want to see consistency as far as your job is concerned. It is important you should have a minimum experience of six months in your current job. If you have changed your job frequently, both your bank and lenders will doubt your employment stability.
Errors In The Application
Even though you consider this as a minor mistake, but this can lead to the rejection of your credit card application. It has been found that most of the applicants have a negligent attitude while filling their application form, such as – entering incorrect details, making spelling mistakes, not mentioning important information, etc. Mismatch of the signature should also be avoided. This is the reason you need to be extra-cautious while filling your credit card application.
Multiple Balance Transfers
If you think that you can outsmart your bank by taking credit from one card to repay the dues on another card, then you need to rethink. Multiple balance transfers also get documented with the credit bureaus. Banks can easily make out what you are up to, the moment they will lay eyes on your credit report and obvious step will be rejection of your credit card application. Remember, the option of balance transfer should only be used during emergency, don’t ever try to misuse the facility available to you.
If you want to avail a loan or want to have a credit card, then make sure your age is 18 years. However, if you are over 18 years of age and below the age of 21, your credit card application can still be denied if you don’t have income or co-signer. Both banks and lenders want income proof or a co-applicant especially if you age between 18 and 21. Well, in case you are a minor, then you have no other option than to wait, on the other hand, if you are a senior citizen then either you can show a proof of income source or you can opt for add-on card with the help of your earning child.