Frequently Asked Questions About Declined Credit Card Applications
I have a high interest rate on my current credit card. I’ve tried to move it to another card with a balance transfer offer but my applications keep getting rejected. What should I do?
Frequent applications and rejection can hurt your credit rating. In this case, you may want to wait a few months and then find a card that suits your needs and also has eligibility requirements you can meet.
I am retired. Will this affect my application?
It depends on the card. Lenders may look at both the employment details and income of a person, which means you could still get a credit card when you are retired if you meet the minimum income requirements. You can compare here.
I am new at my current job. Should I wait for some time before making an application?
Card issuers generally require a minimum of two to four months of employment with your current employer. Alternatively, you may be asked to provide a letter from your employer confirming the terms of your employment and salary.
Is it harder to get approval for your first credit card?
Credit card issuers consider many different factors before approving or declining an application. While you may not have much credit history if its your first credit card application, other details such as your employment and income can help you get approval. You may also want to check out our guide to applying for your first credit card for more information.
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Check Your Credit Report And Improve Your Credit Score
Before you apply for a credit card again, take the time to review your credit report, correct any error, and work on increasing your credit score.
Regardless of the reason your credit card application got rejected, get a free copy of your credit report from the Credit Information Corporation or any of its accredited credit bureaus once a year. Check the accuracy of the information on your credit reportan error may have caused denial on your credit card application. If you spot an incorrect negative remark, dispute it with the concerned lender for correction and request to update your credit report.
If your credit report accurately shows a history of loan default or high credit card balance, its time to break those bad money habits that damage your credit score. Improve your credit score by paying down your balances, settling your overdue accounts, and reducing your loan and credit card applications.
Read more:Should You Get a Supplementary Credit Card or Your Own Credit Card?
Your Income Is Too Low
The income required for a credit card varies by credit card issuer. Your credit card application could be denied if you dont make enough money for that particular credit card or if you don’t have an income of your own. Credit card issuers don’t publish minimum income requirements for their credit cards, so its up to you to estimate which credit cards fit your income.
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How Your Apple Card Application Is Evaluated
Learn about the key criteria used to determine whether your Apple Card application is approved or declined.
Goldman Sachs1 uses your credit score, your credit report , and the income you report on your application when reviewing your Apple Card application. This article highlights a number of factors that Goldman Sachs uses, in combination, to make credit decisions but doesn’t include all of the details, factors, scores or other information used to make those decisions.
If you apply for Apple Card and your application is approved, there’s no impact to your credit score until you accept your offer. If you accept your offer, a hard inquiry is made. This may impact your credit score. If your application is declined or you reject your offer, your credit score isn’t impacted by the soft inquiry associated with your application.
If your application was declined, learn what you can do to try and improve your next application.
If you’re combining accounts for Apple Card Family, some of the credit factors mentioned above may be considered for both co-owners when evaluating a combined credit limit for a co-owned Apple Card.2
Personal finance companies, like Credit Karma, might display various credit scores, like TransUnion VantageScore. While these scores can be informative, if they’re not the FICO score that’s used for your Apple Card application, they may not be as predictive of your approval.
You can also contact Apple Support if you have questions about applying for Apple Card.
You Provided Incorrect Information On Your Application
Filling out forms can be tedious and time-consuming. It can be all too easy to rush through them just to get them finished. If youre not careful though, you can make mistakes. And unfortunately, those mistakes could result in your application being rejected.
Why? Card providers have to verify the information you provide in order to move forward with your application. If details such as your residential address or drivers license number is incorrect and cant be verified, the card provider will have to reject the application.
Is it possible to amend errors after applying? In some cases, yes, it may be possible to amend the information to allow the card provider to proceed with the application. Not always though.
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What Are The 3 Main Reasons Why Credit Applicants Can Be Declined Credit
If youve been rejected for a credit card, you should receive a response from the card provider explaining why. If you dont, you are entitled to ask why you were knocked back. Its a step worth taking as it can help plan ahead to have more success with future credit card or other credit applications.
In general, there tends to be three main reasons why people are declined for credit.
- Your credit report may have incorrect information
Errors can creep into our personal credit reports over time, and this will impact your ability to secure credit. Thats why its worth taking a look at your credit report to be sure everything is accurate and up to date before applying for any sort of credit.
- Capacity to service the debt
Card providers are required by law to be confident you can manage any loans or credit cards before approving your application. If the lender feels your income is too low, or youre applying for too much credit relative to your ability to repay it, chances are your application could be rejected.
- Youre overloaded with debt
When lenders assess credit applications they will often look at how much of your income already goes towards debt repayments. If this debt to income ratio is starting to creep up, the lender may say no to extending you more credit. Thats not always a bad thing. The last thing anyone needs is to be lumbered with unmanageable debt.
Why Credit Card Applications Get Denied
The first step after a credit card denial is to find out what went wrong. There are a variety of reasons why a credit card application might get declined, but you should be able to easily determine what you need to work on. Credit card issuers are required to disclose the reason why they declined a credit card application in the rejection letter.
That said, the reasons a card issuer gives for a rejection might be numerous and quite technical. Try not to get caught up in the specifics particularly since each issuer has its own underwriting standards but rather try to find the overall takeaway for the denial, such as having too much debt or not enough credit history.
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Your Credit Needs Work
Most credit cards offer unsecured lines of credit to borrowers. That means the bank can’t go after their house, car, or another asset if they stop paying. The bank is lending on the belief that the credit card user will pay back what they spend with the card as agreed.
Why would a bank lend to someone with little recourse, then? They have good credit. If someone has a strong history of paying back credit cards on time, they are likely to keep doing so in the future.
If you’ve never had a credit card or have a history of late or missed payments, you may need to do a bit of work to improve your credit score before you’ll be able to get a regular credit card. But there are some cards for people with no credit or bad credit and strategies you can follow to reach a top-tier credit score.
Every credit card company has its own approval criteria. Some cards require you to have a “good” credit score, which is a score of 670 or above. “Very good” scores start at 740. “Excellent” scores are those at 800 or above on the credit score scale that ranges from 300 to 850.
Get A Copy Of Your Credit Report
In general, its a good idea to keep an eye on your credit report. This helps you to avoid accidental delinquencies and surprisingly low credit scores when you apply for a new card.
By federal law, you are entitled to a free copy of your credit report through AnnualCreditReport.com, which includes reports from the three major credit bureaus .
Currently, you can get a free report online each week from all three national credit bureaus by using the AnnualCreditReport.com website, which is authorized by the Federal Trade Commission.
You should review your credit report at least once per year to ensure the information is correct and that there are no mistakes or errors on your file.
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How To Increase Your Chances Of Getting Approved
Take note of the tips listed above if your application for a credit card gets denied. We asked RCBC President and CEO Arniel Ong on what Filipinos can do to increase the chances of getting approved for a credit card.
If you have an existing credit historywhether its paying another card, another loan, or a bill that has your name on itits important to keep these things up to date and maintain good credit card standing, Ong said.
We actually cross-reference and check credit behavior against various sources of credit information, he added.
Your Income Isn’t High Enough
Different credit cards come with different income requirements. If you’re new to the workforce and aren’t earning a lot of money, or if you’re only working part-time, you may have trouble qualifying for certain cards.
Boosting your earnings could open the door to getting approved for a card you really want. If you’re working part-time, try increasing your hours so your wages will follow suit. And if you already work full-time, you may want to consider getting a side hustle. The earnings from your second job will count toward your total income for credit card approval purposes.
Having your credit card applications rejected can be a harsh blow. If that’s been happening to you, try working on the above items and seeing if things change for the better. You can also research different credit cards and see what credit score requirements come with them. That could spare you the hassle of applying for offers you’re unlikely to qualify for and help you focus your efforts on the cards you have a greater chance of getting approved for.
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Your Income Isnt High Enough Or Is Unstable
Banks want to be confident you earn a stable and sufficient enough income to make at least your minimum payments on time every month. Some premium credit cards even explicitly state you need to earn a minimum income in order to qualify .
If your income is inconsistent because youâre a freelancer or work on commission, you may be flagged as a higher-risk applicant, especially if you didnât provide additional documentation in your application showing details about your employment or income history . Youâll also want to double-check if the credit card you applied for had a minimum income requirement that you didnât meet.
Tip: when filling out a card application, check to see if thereâs an option to provide your entire household income as opposed to just your individual income. The combined income of you and your spouse can help boost your approval odds. Meanwhile, if youâre a student, make sure you provide information about any regular financial support you receive from a parent, guardian, or a scholarship.
You Didn’t Completely Fill Out The Application
If your application is missing vital information, like a physical address or date of birth, you risk being denied. The good thing about most online credit card applications is that they often wont let you submit the application until its complete. That way, you eliminate the risk of having your credit card application denied because it wasnt complete.
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A High Score Doesnt Guarantee Approval
A high credit score can help you achieve many financial goals, but you may be surprised that it doesnt guarantee you automatic approval for every credit card you want.
Experts say a FICO score of at least 700 can qualify you for just about any card on the market. And a score in the high 700s can help you get the lowest interest rates and the sweetest rewards.
But like mortgage lenders, card issuers dont just look at your credit score and stamp approved or denied in red ink on your application. They also consider your income level, review your credit report for any past missteps and evaluate how youre using credit at the time you apply for the new card.
Although rare, a consumer with a stellar credit score can still get an unexpected denial letter. Here are five reasons why your high score might not get you your new favorite card.
Reasons Your Credit Card Application May Be Declined
Understanding the different reasons your credit card application may be rejected can help you figure out your next steps. Having bad credit isnt always the cause for a credit card rejection. Some of the most common problems include:
- Your age. If you are under 18 years of age then your credit card application will be declined.
- Incorrect information on your application. Something as simple as incorrectly entering your drivers license number or misspelling your residential address could mean the credit card issuer is unable to verify your details and move forward with the application process. If a mistake is the reason your credit card application is declined, you may be able to resolve the situation with the issuer by amending your application.
- Recent changes in your circumstances. If youve recently moved or changed jobs and you havent updated this information across all your networks, it could be hard for the issuer to verify your identity or access your credit report. As with mistakes on the application, you may be able to fix this by calling the credit card issuer and/or by providing additional documentation.
- Not meeting income requirements for the card. Many credit cards have minimum income requirements. If your annual earnings are less than this amount, youre application will be declined.
Remember
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What You Can Do If Your Application Is Approved With Insufficient Credit Or It’s Declined
If your application is declined, a message with an explanation is sent to the primary email address associated with the Apple ID you used to apply for Apple Card. The message might show your credit score. If information provided by a credit bureau contributed to your application being declined, you can request a free copy of your credit report from that credit bureau using the instructions in the email you receive.
If you have a freeze on your credit report, you need to temporarily lift the freeze before you apply for Apple Card. Learn how to lift your credit freeze with TransUnion.
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Your Credit Score Is Poor
Even though there are many different credit scoring methods available, the most common one used is the FICO scoring method. It uses standard calculation and scoring to ensure credit scores are determined in a fair manner, making accurate.
On the FICO scoring system, your credit score can range between 300 to 850 . The lower your score, the more of a liability you are to the credit card provider. Most credit card issuers have minimum requirements. If you have a poor credit score, then you might be denied.
High Credit Card Balances
Credit card companies take into account how much of the available credit you actually use. It is advised that you keep your balances below 30%. Using all of the credit available to you or maxing out your credit cards wont reflect well on your creditworthiness.
Charge-Offs
This is a note on your credit history that indicates that you havent paid a previous credit card balance for six or more months. Expect a denied credit card application if you havent stuck to a prior payment plan with another credit card provider.
Incorrect Information
Its important that you are honest when filling in your credit card application. Sometimes applications are rejected because the information on the form is either incomplete or inaccurate. Take special care when filling it out.
Job Status
Getting a consistent monthly salary will boost your application. Try not to submit an application that indicates a lot of inconsistency and job-hopping.
Age and Location