Finding and applying for a credit card online is today easier than ever, given the plenitude of service options financial institutions provide. You simply choose the provider whose conditions you’re the most comfortable with, complete the form with your data, and click “apply”, regardless of your time and location. However, as easy as it can be to fill out a credit card application and spend the money as you wish, the same can’t be said about the approval process. Sometimes, it’s not smooth sailing to have your demand granted, and while you’re notified of your application approval on the spot, this is not exactly the case with rejected requests. Credit card providers analyze the supplied information to determine whether you’re qualified, but may not inform you right away of the motives behind your application decline. They would rather send a letter with more information that may take a week or more to arrive, leaving you in the dark until you can figure out what went wrong.
Enough with the guesswork! It only takes a little basic knowledge of your credit history to determine the problem behind your failed request. Read on to discover the common reasons credit card issuers deny applications to boost your odds for approval or ensure the second attempt succeeds.
“Credit invisibility”
Credit cards are among the most widely-used payment methods worldwide, so most enterprises use merchant accounts for small businesses to cater to customers’ needs. You may want to get a credit card for many compelling reasons, like financing expensive purchases at companies that allow it or growing your credit score and history. However, being a novice on the stage can often take a toll on your probability of being qualified for a credit card, since you lack a track record of managing debt and making timely payments. The credit card provider may be reticent to give you money since you can’t prove your reliability as a debt payer and lack the needed experience with loans and credits to be attributed to a credit score.
However, this doesn’t mean you should gloom and doom. This doesn’t mean you can’t get a credit card at all. There are several common entry points into the credit card world, like student or car loans. If this is what you’re looking for, you’ll likely have no trouble getting a credit card.
You can use your borrowed money in numerous places that accept this payment method afterward. For instance, if you need money for dental services, you’ll be able to pay for them in cabinets that have introduced merchant services for dental practices to give clients more flexibility to cover their bills.
Insufficient credit score
The credit score is one of the main factors contributing to a credit card issuer’s decision to lend you money. When applying for this service, the lender may scrutinize it to see how you’ve handled debt in the past. You may not have enough credit score to qualify if your application is rejected. Banks don’t usually state a specific score needed to approve your card, but the higher it is, the more chances you have to succeed.
It is, however, important to note that this aspect isn’t the end-all and be-all of how providers examine your request. An excellent credit score helps, but it’s not guaranteed that you won’t be denied, as even card owners with great scores can have their applications rejected. There’s more to the examination process than credit card scores, and each bank assesses requests based on different criteria.
Unstable or low income
Credit card providers seek to assure you that you’re financially stable and have a reliable source of income so that you can make at least the minimum monthly payments on time. Depending on the bank you opt for, you may also discover that some issuers clearly state that you need a specific amount of money to become eligible to borrow money.
In some cases, a consistent income may be excluded. For instance, you may receive commissions or be a freelancer, meaning your incoming money suffers from fluctuations.
If your application is denied, you’ll need to double-check if the provider has a minimum income requirement you failed to meet. If this is the case, check to see if you can qualify based on the total household income instead of the individual salary. A cumulative income between you and another family member or common-law partner might permit you to apply for the credit card, since you prove you have a reliable source of revenue entering your household regularly.
Stricter rules
Applying for a credit card isn’t as easy today as before the pandemic took the world by storm. These days, lenders are examining potential debtors more carefully than ever. In the event of a small risk that can take the form of additional credit inquiries or late payments, they can opt to decline borrowers’ requests. This may often happen even for individuals with great credit scores.
As research shows, 79% of Gen Z and Millenials try to improve their credit card scores, though many lack sufficient knowledge in the area. As such, you should be prepared for whatever outcome and know that the chances of dealing with a refusal are higher now than ever.
Flawed application
Something as little as an address typo, insufficient information, or a blurry scan of a document can impede your credit card application from being approved. While some details may seem insignificant or easy to deduce, they’re enough reason to get your request denied, as a flawless application is essential for issuers to determine its accuracy.
Minor fill-in errors are the happiest scenarios behind a credit card denial, so if this is your case, reapplying will likely turn successful next time if you pay more attention.
Having your credit card application denied is never fun and can ruin your plans, but it doesn’t mean you shouldn’t retry and do what you can to improve your credit score.
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