Top 5: Whether you’re paying for a device, an unexpected medical need, or other short-term necessities, a credit card is a useful financial tool. These days, applying for a credit card has become much simpler, but there are still a number of requirements that must be met in order to be eligible for one.
Prior to issuing the card, each lender has specific requirements for credit card applications. For this reason, your credit card application might occasionally be denied for any number of reasons. If your credit card application has been rejected recently, here are the top 5 reasons why your application was rejected.
Top 5 Reasons you Credit Card application can get rejected
1. Low Income
The applicant’s income is taken into account when determining the payback capacity when it comes to credit card processing. The requirements for income eligibility vary throughout banks. You must provide documentation, such as income tax records, Form 16, or salary slips, to demonstrate that you make a sufficient living.
Credit card issuers set their own income eligibility requirements, but most of them make sure that applicants can afford to pay off their balances or, at the very least, the monthly minimum payment based on their outstanding balance.
2. Low Credit Score
Applications for credit cards with poor credit ratings are typically denied by lenders. One of the most crucial elements in determining whether a credit card application is approved or denied is credit score. When determining a customer’s creditworthiness—that is, whether they can be relied upon to repay loans they have obtained from them—the majority of banks use a conventional credit score rate.
3. Occupation
When granting credit cards, credit card firms take occupations into account as additional essential factors. Even when they meet the minimal requirements, some credit card applications may be denied because of the applicant’s employment. An applicant’s ability to repay debt is assessed taking into account the company’s reputation. The approval of your credit card application would likewise be adversely impacted by an uncertain job history.
4. Unstable work history
You will have a harder time getting your credit card application accepted if you have no credit history to share. If you don’t have any credit history, how will the bank that issues the card assess your capacity to manage debt and repay it?
5. Having many cards
There is a good probability that a person whose credit application is denied will have many credit cards in their name. A favourable debt-to-income ratio is the only criterion that all lenders use to qualify applicants as trustworthy. A lender is unlikely to be persuaded of a borrower’s creditworthiness if there is a significant revenue outflow as a result of many credit cards. Borrowers that transfer credit card balances or switch cards frequently are not preferred by lenders.
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