Worried about your credit card application being rejected?
There are a number of different steps and requirements you need to meet to get a credit card application approved. This also means there are many reasons your application could be unsuccessful – and most lenders won’t automatically tell you why it was declined.
From making a mistake on the application to not including supporting documentation or dealing with poor credit history, here we take a look at the most common reasons credit card applications are rejected and what you can do about it.
Reasons your credit card application may be declined
Understanding the different reasons your credit card application may be rejected can help you figure out your next steps. A credit card application rejection is not always caused by having bad credit. Some of the most common problems include:
- Your age. If you are under 18 years of age then your credit card application will be declined.
- Incorrect information on your application. Something as simple as entering your driver’s license number wrong or misspelling your residential address could mean the credit card issuer 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 issuer by amending your application.
- 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 issuer 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 and/or by providing additional documentation.
- Not meeting income requirements for the card. Many credit cards have minimum income requirements. If your annual earnings are less than this amount, you’re application will be declined.
- Poor employment circumstances. Stable, ongoing employment helps show issuers that you can meet repayments for a new credit card. So if your employment is temporary, casual, part-time or hard to verify for some other reason, you may find it hard to get approval for certain cards.
- 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 issuer may determine that there is a high risk you won’t be able to meet repayments and decline your application.
- Not meeting citizenship or residency status. While there are some credit cards available for temporary residents, other cards are only available for permanent residents and citizens of your respective country. So your application could be rejected if you don’t meet these requirements for a particular card.
- Bad credit history or “adverse bureau” information. When you apply for a credit card, the issuer will request a copy of your credit file from a credit reporting agency. If you have negative or “adverse bureau” information in your credit history – such as late payments, defaults, too many applications for credit or even not enough credit history – the issuer may find you do not meet the requirements for the card and decline your application.
It’s important to remember that credit card issuers assess applications on an individual basis, so the specific reasons your application may be declined will vary depending on the circumstances. Some issuers may be willing to discuss these details with you but others may not. Either way, it’s a good idea to keep a copy of your application and go over all the details above to figure out the likely reason/s it was declined.
How can I improve my chances of credit card approval?
Now that you know the most common reasons credit card applications are declined, you’ll be able to avoid those issues next time you apply for a credit card. The following key strategies also help you increase your chances of approval:
- 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 are 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 free credit report from all of the major bureaus once every year. 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 residential address, phone number, email address and employment information is updated across all your networks so that it is easy for credit card issuers 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 up any errors before you hit the “submit” button.
- Have your supporting documentation ready. Credit card issuers require a range of documents before they can fully process your application, including copies of your passport or driver’s license, pay-slips 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 are my approval odds with the most popular card issuers?
|Credit quality||Approval odds||Recommended credit card issuers|
||Well below average||First Progress Platinum Elite MasterCard® Secured Credit Card, USAA Secured Card Visa Platinum® Card, First Progress Platinum Prestige MasterCard® Secured Credit Card, UNITY Visa® Secured Credit Card, USAA Secured Card American Express® Card, Fingerhut Credit Account, AccountNow Prepaid Debit Cards|
||Below average||Credit One Bank® Visa® Cash Back Rewards, Official NASCAR® Credit Card from Credit One Bank®, Credit One Bank® Unsecured Platinum Visa®|
||Above average||Chase Sapphire Preferred® credit card, BankAmericard Travel Rewards, Southwest Rapid Rewards® Premier credit card, The Starwood Preferred Guest® Credit Card from American Express|
||Well above average||Barclaycard Arrival® Plus World Elite Mastercard®, Barclaycard CashForward™ World Mastercard®|
Dos and don’ts for credit card applications
- Do compare credit cards before you apply
- Do check all the application requirements
- Do provide accurate information on your application
- 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
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 applications are declined, you can make informed decisions about what cards to apply for and increase your chances of approval in the future.