The Most Common Reasons That Credit Card Applications Get Denied

by Leon on January 15, 2013

credit card applicationHave you been looking to get a credit card? If so, you’re certainly not alone. Each year, credit card companies make millions and millions of dollars due to the astronomical amount of people who have one of their cards. In some ways, a credit card can make life more convenient when it comes to booking reservations and making large purchases. Plus, if you have a good payment history, it can do wonders when it comes to boosting up your credit (that is if you use it responsibly).

For these reasons, it could be wise to apply for a credit card. However, before you do, we wanted to provide you with five of the most common reasons why credit card applications are denied, just so that you can be prepared ahead of time:

You didn’t complete the application. In school, some of us were told that we could get a few points just for making sure we put our name on the top of our papers. It was partially to prepare us for filling out things like credit card applications. When vital information is missing, you will definitely be denied. Just something to keep in mind.

Your employment situation. Remember that a credit card is basically a loan. So, if you don’t have a job, the credit card company knows that you’re not (currently) in a position of being able to pay them back. However, there are a couple of other things that they look for as it relates to your employment history including how much money you make and how long you’ve been on your job. Too low of an income also sends the sign that you could have difficulty making payments and being on your job for less than a year or so gives the impression of instability.

You have too many inquiries. If your credit history shows that you have too many inquiries for other credit cards or loans, this also sends a message of potential instability as it relates to your financial situation. It can also knock a couple of points off of your credit score, so make sure to keep inquiries down to a minimum.

You have a charge-off. Suppose last year you purchased a wireless credit card machine with a different credit card and you never paid the balance and so the company charged it off. That tells other credit card companies that you’re not really reliable when it comes to paying what you owe. That can definitely keep you from getting a new credit card. Also, if you have a late payment within the past year, that could prevent you from getting one as well. Credit card companies need to know that you’ll give them back the money that they lent to you and they are more confident in that fact when you’ve paid other individuals what you have owed them.

You have high balances. All credit cards come with a limit. If you are always maxing out that limit, that also makes you appear like a bit of a risk. It sends the message that you are depending on all of the credit that’s available to you and also taking your time about paying what you owe. Therefore, if you want to appear like a desirable candidate for a loan, make sure to also only use a portion of the limit that you already have. It can increase your chances of being approved significantly.

Related Post


{ 1 comment… read it below or add one }

Alex June 19, 2013 at 11:47 am

This is a really good list to learn from here. I have always been a big believer in preparation where credit is related, in other words I want to know as much about the lender I am about to petition as possible. It’s sort of like studying up on the other team I’m about to play, so that I am better suited to beat them come game day. I have to know what the lender’s approval standards are and make sure that my credit report lines up with them. At this point I can work on any discrepancies and from there go for the credit line. I obviously want the least amount of denials as possible. Thanks. Here is some good related info

Leave a Comment

Previous post:

Next post: