Getting a credit card is essential for many important big purchases you’ll have to make throughout your life, so when your application for a credit card is denied, it can feel frustrating and overwhelming.
There are many reasons why your credit application can be denied. Still, thankfully, legislation from the 1970s mandates that creditors inform you why your application was denied, usually in the form of a letter. This article will help you understand why your credit card application was denied.
Your credit score is one of the first things your credit card issuer will look at before approving or denying your application for a card. The best credit score range for each card is different, and if your score is too low, the lender might not let you get the card.
Before you apply, check your FICO and VantageScore credit scores. Then, select the credit card you’re applying for based on what your qualify for based on your credit score.
If you’ve missed several card payments in the past or have had bills sent to debt collection agencies, a financial company may not want to take on the risk of a client with a spotty history of paying their debts.
While you can’t erase late payment history from your report, you can start rebuilding your credit with a card designed for those with a poor credit history.
You must be 18 or older to get your credit card. Younger applicants will be denied, but you can be an authorized user on a parent's card if you’re under 18 and looking to build a good credit history. However, a lack of credit history signals risk to banks and lenders, so they’re more reticent to give newer applicants a card.
For many cards, you’ll be required to report your income and how much you pay monthly for housing on your application. If the lenders decide your income is too low and poses a risk to their investment, your application will be denied.
Whatever you do, don’t go around applying for lots of different credit cards at once. This signals to the lenders that you’re a credit risk, making them much more likely to deny your application.
Banks and lenders are vested in making sure you pay off your card, so applying for lots of them at once can negatively affect your chances of getting a credit card.
Lenders must ensure that they’re billing the correct person and that the user is accurate. So if there’s something that’s spelled incorrectly or improperly filled out — whether accidental or purposeful — your application will likely be denied.
Mistakes happen, and it’s also possible that someone working at the bank inputs your information incorrectly, causing it not to match the information on your application. If the error was unintentional, it’s worth fixing the incorrect information and suggesting the issuer reconsider your application.
Credit cards can often be stolen by criminals, which is why many credit issuers have restrictions on applications. Card churning, for example, involves taking advantage of sign-up promotions with new cards and then quickly moving on to the next one.
Loyalty is important to your banks, so there are restrictions on what kind of cards you can apply for based on what you already have and how often you can use them.
Recent bankruptcy is a significant red flag to lenders, indicating that you couldn’t pay your agreed-upon debts in the allotted time frame. In addition, with an open bankruptcy, you’re almost certain to be denied a credit card — it’s simply too great a risk and headache for issuers to want to deal with.
A few cards are available if there’s a bankruptcy listed on your credit report, like the secured credit card, which requires you to pay higher fees, interest rates, and potentially security deposits on large payments.
You’ll want to take active steps to repair your credit if your application is denied. Budget monthly expenses, save money where possible, and settle your outstanding debts. Unfortunately, credit repair doesn’t happen overnight and can take a long time to rebuild if you’ve had a history of late payments or debt.
One way to help repair your credit is by getting a loan with Simple Fast Loans. An installment loan can help you pay off any outstanding debts and thus repair your credit over time.
For those looking to take this route, you can contact Simple Fast Loans to discuss getting a loan to pay off your debt and then pay it off in installments on new terms.
Even if other lenders have previously turned you down, Simple Fast Loans might be able to help you. Taking care of your outstanding debts with a loan can simplify the debt repayment process and put you on the road to better credit.
Of course, your credit will continue to suffer if you don’t pay your bills on time or if you run up your credit card balances even further. So, make sure you make payments per your agreement for the best chance to repair your credit.
There are many reasons why your credit card application can be denied, but thanks to laws in the U.S., lenders are required to inform you why your application was denied.
Based on these results, you’ll know how to proceed to have a better chance of being approved next time. Consider paying off your debts with an installment loan from Simple Fast Loans before applying again.