Applying for a credit card but the application gets rejected over and over again?
You have tried multiple times and with multiple banks but still, did not get a credit card.
Wondering why does it happen?
Don’t worry we will guide you through and make it simple for you to know what it takes to get a credit card successfully.
Also, this blog will help you know what are the things that you should avoid in order to maintain your financial position which will help you earn credibility in minds of lenders.
So, what can be the reasons for credit card applications being rejected?
1.CIBIL Score:
The first and foremost reason for rejected credit card applications is most of the time a poor CIBIL or credit score. A credit score is the creditworthiness of the applicant or the customer. It is that factor that determines your payback capacity and hence gives an idea to the lender whether you are worthy of being given credit or not.
It will be counted as your potential to set off liabilities with whatever income you earn thus giving an idea of your priorities as a debtor or receiver of the credit.
It is generally expected that your credit score is at least 700 and above which is a good score and CIBIL is one of the companies which determines and informs your credit score to banks or financial institutions.
So, in order to get a credit card, it is necessary to have a good credit score without which the application gets rejected.
2.Low Income:
Apart from your credit score, the other vital factor is low income. This may also be one of the reasons for your application being rejected. There is a specific level of income criteria designed by every bank or financial institution which has to be met in order to secure a credit card.
Even if your credit score is good sometimes your income can be deciding factor as it will be the main source of repayment of the credit availed by you. If your income is not satisfactory enough to back your credits then it will become difficult to make repayment. Thus, banks will usually look through your financial statements and other details from your workplace to confirm that you have a good income-earning capacity and one of a long-term nature.
3.Loan Balances:
Bank will specifically check for your loan balances both paid and unpaid or recurring so as to know your repayment criteria and techniques. If you have loan balances that are too high compared to your current income then that will reflect in your bank statement making it an important factor in rejecting the application.
Another thing is that your loan repayment ways will also determine whether or not you are eligible for the credit card facility. If the means of your repayment or the income-earning methods are illegitimate or against banks policies then your application will be rejected irrespective of other factors.
4.Multiple Credit Cards:
If you have multiple credit cards with multiple banks then they have to be within the limits prescribed along with all of the above mention factors being applicable to all the existing credit cards.
If you have credit cards with low credit scores then your application shall be rejected but if you have too many credit cards and unmanageable income backing then that will be the most important factor for rejecting a credit card application.
5.Delayed payments:
When your statements reflect the delay in repayment or payment and show too much of existing liabilities it will be difficult for you to get a credit card.
Your delayed payments will show a lack of paying capacity in turn resulting in delays in credit card payments if one is granted to you. Hence a credit card application will not be accepted because of this factor.
Further, the delayed payment will also reflect your priorities as to whether you pay first or spend more making it a deciding factor in a rejected application.
Summing up, all the above-mentioned reasons are deciding factors in the rejection or acceptance of your credit card application. The key is to keep a check on all of them regularly and make sure that you don’t end up messing up any one of them because that is not just cause the rejection of your credit card but will also speak a lot about your financial position, credit-bearing capacity, future credit earning and maintaining a financial balance.
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