Reasons for Credit Card Application Denial & How to Get Approved

This Article was fact checked and last updated for accuracy on February 25, 2020 by Mani Karthik

How many of you prefer to carry cash with you every time you step out of the house? In today’s scenario, the answer would be – very few. Being used by a large number of people, credit cards, after debit cards, have become the most prominent way of making payments. According to data released by the Reserve Bank of India, a total of 24.51 million credit cards were in operation in March 2016. However, getting a credit card is not as easy as many might believe. The chances of rejection are very high if you do not take care of the below mentioned points.

Main Reasons Credit Card Applications Get Rejected

• Poor Credit History: In India, a CIBIL score above 700+ is the safest bet. Anything less will depict your poor money management skills or your non-payment of dues on time.
• Applying for Too Many Credit Cards: Many of us, out of desperation, apply for too many credit cards within a short period of time. However, this act can go totally against you. When you apply for a credit card or loan, the bank conducts a credit inquiry on your credit report, where every inquiry reduces your CIBIL score and the chances of your credit card application of being approved.
• No Credit History: You would be surprised to know that if you do not have any experience with credit and no activity in your bank accounts for the last six months, your credit card application could be denied. However, you can get a credit card with no credit history.
• Having Too Many Credit Cards Already: Although there is no set limit as to how many credit cards own can own, a credit card company can count this factor against you.
• Low Income: Varying from company to company, there is a certain income requirement when you apply for a particular credit card with a certain limit.
• Unavailability at the Residence at the Time of Verification: To verify whether the address provided by you is authentic or not, companies conduct a physical verification of the property. Your absence will be enough to raise their eyebrows.
• Unstable Job Profile: There are many individuals who face difficulty in keeping a job for long and they keep changing their jobs, with periods of unemployment in between. Credit card companies find this factor undesirable, as an unstable work history doesn’t give them the assurance that their loan will be repaid on time, if at all.
• High Loan & Credit Card Balances: In situations where your loan balances haven’t been paid for long or you have maxed out the available credit, a new credit card company will hesitate to provide you a credit card.
• Recent Public Record: There are three types of public records related to debts, which appear in a credit report and hurt the credit score the most. The first of these records is bankruptcy, with the others being tax lien and civil judgments that include the debt a person owes through the courts as a result of a lawsuit. However, with time, the effect of the collections and public records on the credit report lessens.
• Charge-off: If your credit card balance is not paid for more than six months, it is called charge- off and can lead to the rejection of your credit card application. Click on the link to see what you can do to remove it.

Now you know the common reasons why your credit card application might be denied and also the possible answers as to how you can overcome them for your next application.