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Why was my credit card application denied?

Learn the 12 most common reasons your credit card application was denied, and how to improve your chances of approval.

There are a variety of requirements to meet to get your credit card application approved. On the flip side, there are several reasons why your credit card application can be denied. Here are 12 of the most common reasons why credit card applications are denied and what you can do to improve your odds of approval.

12 reasons your credit card application may be denied

Most credit cards require similar eligibility requirements; however, some cards do have tougher approval requirements, while others focus on fast, easy approvals to help borrowers build their credit history and score. To help, here are the 12 most common reasons why your credit card application may be denied.

1. Credit score is too low

Every credit card will set a minimum credit score requirement — the lowest credit score an applicant to have in order to be approved. In general, however, expect to run into difficulties if your credit score is less than 650. (Credit scores in Canada range between a low of 300 to a high of 900.) If your credit score falls between 300 and 649, you still have credit card options but they will be limited.

2. Bad credit history

When you apply for a credit card, the provider will request a copy of your credit report from one of the two credit bureaus: TransUnion and Equifax Canada. If you have negative information in your credit history – such as late payments or defaults – the provider may decide that you do not meet their eligibility requirements and decline your credit card application. To help, focus on building your credit score. For tips and suggestions, check out the Finder guide on minimum credit scores and credit cards.

3. Short credit history

Sometimes your credit card application can be denied because your credit history is too short. Remember, lenders will review your credit history — the record that shows all the accounts and repayments you make, over time. If this credit history is short — few accounts or no accounts beyond a year or two — the lender may decline your credit card application due to a short credit history. In this situation, you’ve done nothing wrong; you are simply new to building credit. To help build your credit history, consider applying for a secured credit card or, if you’re a post-secondary student, a student credit card, instead.

4. High credit utilization ratio

Credit utilization — the ratio between how much credit you have access to and how much you’ve already borrowed — is one tool lenders use to assess your financial health. Experts generally agree that you should keep this ratio below 30%. For example, let’s assume you have two credit cards, one with a limit of $2,000 and the other with a limit of $5,000. But you paid for a car repair at a total cost of $4,500. Your credit utilization ratio would be 64% — since using the credit card to pay for the $4,500 of vehicle repairs would use almost two-thirds of your available credit. If your credit utilization ratio is too high, your credit score will be negatively impacted, as well, further increasing the chance of getting your credit card application denied.

5. Too many recent credit applications

Applying for too many credit cards or other types of loans within the same time frame is a red flag to lenders. It signals to creditors that you’re desperate for money, which means your finances might be in danger. Plus, in order to assess your application, lenders have to do a hard check on your credit report, which lowers your credit score. Only apply for credit cards or credit that you absolutely need and always check the eligibility requirements.

6. Recent changes in your circumstances

If you have recently moved or changed jobs and you haven’t updated this information across all your networks, it could be hard for the provider to verify your identity or access your credit report. As with mistakes on the application, you may be able to deal with this by calling the credit card issuer or by providing additional documentation.

7. Income is too low

Creditors want to make sure you’re earning enough money to pay back any debt, including the balance you owe on a credit card. It’s why most credit cards have minimum income requirements, generally ranging from $12,000 to over $80,000 per year. If your annual earnings are less than the required amount, your application will be declined.

8. Insufficient employment circumstances

Stable, ongoing employment helps show providers that you can meet repayments for a new credit card. If your employment is temporary, part-time or hard to verify for some other reason, you may find it hard to get approval for certain cards.

9. Other financial risks

When you apply for a credit card, you have to enter information about your income and expenses. If you have a lot of expenses in comparison to your income, the provider may determine that there is a high risk you won’t be able to make your repayments and therefore decline your application.

10. Not meeting citizenship or residency status

While there are some credit cards available for temporary residents, other cards are only available to permanent residents and citizens of Canada. Your application could be rejected if you can’t prove you have a valid Canadian address, or are a permanent resident.

11. Your age

If you’re under 18 years of age, or the age of majority in your province or territory, then your credit card application will be declined. Learn more about getting access to credit if you’re under 18 years old in our full guide.

12. Incorrect information on your application

Something as simple as entering your driver’s license number wrong or misspelling your address could mean the credit card provider 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 provider by amending your application.

Remember that everybody’s finances are different…

It’s important to keep in mind that credit card providers assess applications on an individual basis, so the specific reasons your application may be declined will vary depending on your specific circumstances. Some providers may be willing to discuss these details with you, while others may not. Either way, you can keep a copy of your application and go over the details above to figure out the likely reason it was declined. It also doesn’t hurt to contact a lender to discuss why your application specifically was denied.

Do’s and don’ts for credit card applications

Do’s

  • Do compare credit cards options before you apply
  • Do check all the application requirements
  • Do provide accurate information on your application

Don’t’s

  • Don’t apply for a credit card too many times
  • Don’t apply for another card soon after being rejected
  • Don’t apply if you can’t meet the application requirements
  • Don’t provide false information on your application

Is it illegal to lie on credit card applications?

Yes. It’s easy to assume that you can get away with stretching the truth on a credit card application, and some people do, but the consequences of doing so can be severe. Lying to get a credit card is considered a fraudulent act according to section 342(1) of the Criminal Code of Canada.

There are a number of ways someone could lie on a credit card application including inflating or misrepresenting their annual income, employment status, residential status and other personal information.

What happens if I’m caught lying on my credit card application?

Best case scenario — your application is declined and you’re flagged for future applications at the provider. That means that even future credit applications could still be declined, even if all other factors meet the lender’s eligibility requirements.

Worst case scenario — you’re at risk of serving up to 10 years in prison (according to section 342(1) of the Criminal Code). Or the flag goes against your credit profile meaning all lenders can review the fraudulent actions. This can prevent you from getting any type of loan at any point in the future. Ultimately, the consequences will depend on the nature, type and extent of the fraud.

How can I improve my chances of credit card approval?

If you want to limit the chance that your credit card application will be denied, consider the following tips:

  • Choose a card that suits your circumstances. Make sure the credit card you apply for is right for your needs by considering how it will fit with your current financial situation. For example, if you don’t earn a lot of money, you may want to look at credit cards for low-income earners. Similarly, if you’re retired, on a pension or self-employed, you could look at the range of cards that accommodate these circumstances.
  • Get a copy of your credit report. You can request a copy of your credit report from Equifax Canada or TransUnion. This allows you to make sure all the details listed are current and accurate. It can also give you a better understanding of how you can improve your finances. For example, if you see a lot of listings for late payments, you may want to focus on paying your bills on time to help improve your credit score.
  • Update all of your details before you apply. Make sure your address, phone number, email address and employment information is updated across all your networks so that it is easy for credit card providers to verify the information on your application.
  • Read over the application before you submit it. Going over the details in your application will help you pick out any errors before you hit the “submit” button.
  • Have your supporting documentation ready. Credit card providers require a range of documents before they can fully process your application, including valid ID, pay stubs and bank statements. It can speed up the application process if you have these documents ready before you apply because you’ll be able to provide them as soon as they’re requested.

What credit cards can I apply for with my credit score?

Credit scoreApproval oddsRecommended credit card issuers
  • Poor
Well below average

559 and below

  • Capital One Secured Card
  • Fair/Good/Very Good
Just above or below average

560-759

  • Excellent
Well above average

760-900

Compare credit cards

Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
RBC ION Visa
3,500 points
1.5 points per $1 spent
20.99%
$0
Min. recommended credit score: 660
Get 3,500 Avion points when you get approved for the card.
Neo Credit Mastercard
Get $25.00 + up to 15% cash back
Average 5% cash back
19.99% - 29.99%
$0
Min. recommended credit score: 600
Get $25 when you sign up for the Neo Financial Mastercard. Plus, earn bonuses like 15% cashback on your first purchase at most partners, and earn an average of 5% cashback at thousands of partners and at least 0.5% cashback guaranteed.
Tangerine World Mastercard
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn 10% cash back (up to $100) when you spend $1,000 in the first 2 months. Valid until April 30, 2024. Plus, get a 1.95% interest rate on balance transfers for the first 6 months.
American Express Cobalt Card
15,000 points
Up to 5x points per $1 spent
20.99%
$155.88
Min. recommended credit score: 700
Earn up to 15,000 Membership Rewards points in your first year. Earn 1,250 Membership Rewards points for each monthly billing period in which you spend $750 in purchases. That’s up to $150 towards a weekend getaway or concert tickets.
BMO CashBack Mastercard
5% cash back
Up to 3% cash back
20.99%
$0
Min. recommended credit score: 660
Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,500). Plus, get a rate of 0.99% on balance transfers for 9 months. A 2% fee applies to transferred balances.
Tangerine Money-Back Credit Card
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn 10% cash back (up to $100) when you spend $1,000 in the first 2 months. Valid until April 30, 2024. Plus, get a 1.95% interest rate on balance transfers for the first 6 months.
RBC Cash Back Mastercard
N/A
Up to 2% cash back
20.99%
$0
Min. recommended credit score: 650
RBC ION+ Visa
7,000 points
3 points per $1 spent
20.99%
$48
Min. recommended credit score: 660
Get up to 7,000 welcome points. Get 3,500 points on approval and earn 3,500 bonus points when you spend $500 in your first 3 months.
BMO Preferred Rate Mastercard
0.99% rate on balance transfers for 9 months
N/A
13.99%
$0 annual fee for the first year ($29 thereafter)
Min. recommended credit score: 660
Get a rate of 0.99% on balance transfers for 9 months with a 2% transfer fee. Plus, get the $29 annual fee waived in the first year.
BMO eclipse rise Visa Card
25,000
Up to 5 points per $2 spent
20.99%
$0
Min. recommended credit score: 660
Earn up to 25,000 bonus points.
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Bottom line

Credit card issuers require a wide range of information before they can make a decision about your application. By learning more about these requirements and the common reasons credit card applications are declined, you can make informed decisions about what cards to apply for and increase your chances of approval in the future.

Frequently asked questions about declined credit card applications

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