Why was my credit card application denied?

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It’s certainly upsetting getting denied credit, but it could happen to anyone. For that reason, it’s better to know the possible reasons why your application can get rejected so that you can be prepared and increase the chances of getting approved.

Most people think that the credit score is the most important thing when it comes to applying for a card, but the truth is that your application may be rejected even with a good score.

Here are six possible reasons why your credit card application can get denied:

Your income is too low

Even though loaners don’t require a specific monthly revenue, it plays a significant factor in whether or not you’ll be granted a card. This is why applying for the right credit card is extremely important. There is a huge variety of credit cards, and you must choose the one that you are most likely to fit the criteria.

You have a limited credit history

A history of timely payments on things like loans, mortgage, and credit card bills is a huge factor companies use to grant credit, and this could take years. This is undoubtedly bad for young people who didn’t have time to build their creditworthiness. Don’t worry, however, there are some great options for people with limited credit history.

High balance

Lenders will probably not grant you credit if they see that you have too much debt, they’ll think you are struggling to pay it off, and you’ll be seen as a risk. Therefore, it’s a great idea to liquidate your debts before asking for a new credit card.

Debt Utilization Ratio

Your debt utilization ratio is defined by the total of your monthly outstanding credit card balances divided by your total credit limit. You must focus on getting the lowest ratio – ideally less than 50%.  Lenders use this as a risk factor to eliminate people that are most likely to max out their cards.

Missing information

Loan and credit card companies need to know all the information about you to decide about your request. Therefore, if you leave out essential data like address or place of birth, you’ll most certainly get rejected. Make sure all your information is complete and accurate before submitting an application.

Too many credit card inquiries

A hard inquiry is placed on your history every time you apply for credit. If you submit too many requests, you’ll be seen as a risk. On that account, keep the inquiries to a minimum to increase your chances of getting a new card.

 

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