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Why was my credit card application rejected?

There are many reasons why credit card applications get turned down. Learn how to improve your application and increase your chances of approval next time.

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Jeremy Cabral

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James Martin
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    When your credit card application is rejected, the bank doesn’t usually explain why you weren’t approved. This can make it difficult if you want to apply for another card but aren’t sure how you can improve your chances of approval.

    Read on to learn the main reasons why credit card applications are rejected. Plus, some tips to help increase your chances of approval next time.

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    Why was my credit card application rejected?

    As each unsuccessful credit card application will put a negative mark on your credit history and could decrease your chances of future approval, it’s important that you get your head around common application issues before you get started with another credit card application.

    • You filled out your application form incorrectly

    You risk being rejected if your application contains incorrect information or is missing key details. The good thing about most online credit card applications is that they will not accept your submission with any missing fields. But if you realise you’ve made a mistake in your application after it’s submitted, contact the card company immediately and request that they amend it.

    • You don’t meet the age requirement

    You must be at least 21 years of age to apply for a credit card in Singapore. However, you are eligible to apply for student credit cards if you’re at least 18 years of age and has consent from a parent or guardian. If you don’t meet this requirement, your application will automatically be declined. In some cases, additional cardholders must also meet minimum age requirements that are different to the primary cardholder. Make sure you check these details as well, because they could affect your application if you apply to have someone else use the account and they’re not eligible.

    • Your income doesn’t meet the minimum requirement

    Different credit cards have different income limits. To ensure that you don’t take on more credit than you can afford, check the minimum income requirement for your credit card before applying. To prove your income, make sure you provide recent copies of payslips and proof of employment.

    • You applied for an unrealistic credit limit.

    It is possible that your application was rejected because you asked for a credit limit that was too high, even though you could have qualified for a lower credit limit. It may be prudent to request a lower credit limit to start with and then work your way up from there. If you have a good track record of repaying your balances, card companies are usually happy to increase your credit limit after you’ve had the account for a while.

    • You already have too much debt

    If you haven’t been paying off your existing loan balances in a timely and responsible fashion, credit card issuers will be reluctant to grant you even more credit. Before you apply for another credit card, pay off some of your existing debts to prove you are a responsible borrower. If you’re struggling with high interest, consider a balance transfer card that’ll let you pay down your debt faster without the cost of interest.

    • You already have too many credit cards.

    Yes, there’s such a thing as too many, and credit card companies get nervous if you’re applying for more credit when you already have a lot of available credit. But before you go cutting up those cards, carefully consider which ones to keep. If you have several cards, it might be wise to consolidate your existing debt under a balance transfer credit card. Not only will this make it easier to pay down your debt, it will also reduce the number of active credit accounts on your record.

    • Your public record isn’t pristine

    Court records like bankruptcy, tax liens and some civil judgments can also factor into why your credit card application was rejected. Unpaid debts will stay on your credit report longer than paid ones, but fortunately, with time all public records generally lose their impact on your credit file.

    • Your credit file shows too many credit inquiries

    Each time you apply for any form of credit, the credit provider will request a copy of your credit file for assessment purposes. Every time this happens, a new credit inquiry is recorded on your file. Credit inquiries are not favourably viewed by future credit providers, and too many credit inquiries can sink you into a vicious cycle of more rejected credit applications.

    • You have applied for too many cards in a short amount of time

    This point relates to your credit history, but it’s worth noting separately that some banks will even automatically reject your application if you apply for another card within a week of your previous application. Aim to always wait a few months between applications.

    • You have poor/short/unstable credit history

    Before you apply, consider getting a copy of your own credit file to check that you have a good chance of being approved. Even if you don’t have terrible payment defaults or late payments marked on your credit file, a short credit history does not convey the stability that lenders are looking for. If you find yourself in this position, take small steps to build up your credit history, such as by getting a mobile phone or utilities in your name. Make sure you pay your bills on time to establish a good track record for yourself before you apply for another credit card.

    • Your employment circumstances are not ideal

    Lenders are looking to see that you have stable, ongoing employment to help meet the repayments for your new credit card. If you have only temporary, casual or part-time work, you may find it hard to get approved for some credit cards. Constantly switching jobs is usually red-flagged too.

    • Your financial position is risky

    When filling out your card application, you have to provide information about your income and expenses. This is to help lenders assess your ability to meet repayments, but can certainly backfire if you list a lot more expenses than income.

    • Your housing situation is unstable

    Some credit card providers even scrutinise your housing situation. In this instance, you could be considered a risky borrower if you have frequent changes in address or if you’ve just settled into a new home.

    Learn how to check on your Credit Card Application

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    Tips for getting your credit card application approved

    • Regularly check your credit report. Review your credit history or purchase a copy of your credit report. If it isn’t perfect, identify the negative listings. Clerical errors are not uncommon, so if you find anything odd in your credit report, contact Credit Bureau Singapore (CBS) and request an investigation and correction.
    • Thoroughly investigate the decision. If you’ve received an application rejection and don’t understand why, take it upon yourself to find out. For starters, you may wish to call the card company and simply ask why. You have nothing to lose, and you may even gain some insight as to what went wrong.
    • Identify your problem and fix it. Use the list in the previous section to help you identify where your application might have gone wrong. Once you’ve figured out where your application or credit file needs improvement, you may be able to rectify it and make the necessary improvements before applying for another credit card.
    • Watch your credit utilisation ratio. Your credit utilisation ratio factors into your credit score and application assessment. This ratio is calculated by dividing your existing credit card balance by your available credit limit. High credit card balances are very damaging to your application because a healthy credit utilisation ratio shouldn’t exceed 30%. This means that if your available credit limit is S$10,000, you should only be carrying a S$3,000 balance on the card at most. To lower this ratio, you should pay down your existing balance as soon and as often as possible, more than once a month if need be.
    • Improve your debt-to-income ratio. This is the amount of debt you have compared to your income. For example, if you earn S$50,000 a year and have S$5,000 debt on a credit card, that’s 10% of your income. Credit card providers use this information as a general indication of your ability to repay debt. To improve your ratio, aim to pay down your debts and include all sources of income in your application. Some people forget to list dividend income or part-time and casual income thinking that it doesn’t matter when it really does.
    • Demonstrate a good savings history. This is especially helpful if you plan on applying for a credit card with your bank. Having a savings account where regular salary deposits are made can improve your internal bank credit rating – and your chances of credit card application approval in future.
    • Demonstrate responsible repayment behavior. If your credit report is riddled with late or overdue payments and defaults, there is no quick way to fix this. You will need to show that you can be a responsible borrower by making prompt and full payments over time. Once you have built up new history that shows you are a responsible lender, you will have a greater chance of getting your credit card application approved.
    • Consider engaging a credit repair specialist. If you discover a number of negative listings in your credit file and don’t know how to fix them, you could pay to a credit repair service look into your file for you. This could be costly but you may find that the price for having clean credit is worth paying. But do note that credit repair can only remove listings that have been made in error or that have overstayed their legitimate period on your file. It is not a magic wand that erases all your mistakes.
    • Give it time before you apply again. As explained in the previous section, making too many credit card applications during a short period results in having too many credit inquiries on your credit file. This looks bad to lenders, so if you’re rejected, try giving it a rest before applying again. The longer you can wait, the better.

    Bottom line

    Having your credit card application rejected can be unpleasant, but there are things you can do to change that or to prevent it from happening again in the future. Making sure that you apply for the right card with the right eligibility fit helps, as does making sure your credit report is in good form. Sometimes, things can be even simpler. All you may need is a little time before your payment defaults disappear from your credit file…

    Frequently asked questions

    What do I do if my application is rejected?

    If your application gets rejected, you can ask the card issuer why they turned you down and if it was due to your credit report. If you think there may be mistakes on your report, it’s important to fix these immediately. Try to take any steps you can to improve your credit score – read our guide for more information. While it may be tempting to make another application straight away, it’s better to wait until you’ve resolved any issues that may have caused the initial rejection.

    Is it bad to get declined for a credit card?

    It can be, yes. When you apply for a credit card a lender will typically be able to see – via your credit report – that you’ve had an application turned down in the past. This means you could be prevented from applying for your next best card.

    How long does a declined application stay on my credit file?

    It’s hard to say for sure, as each lender has its own acceptance benchmark. But credit enquiries can stay on your credit file for five years. If you don’t meet the eligibility requirements for regular (unsecured) credit cards, then a secured credit card may be an option to think about.

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