Credit card request refused? Here’s how to get the next one approved

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When your credit card application is denied, the first thing to do is get your credit report back.

If your credit card application is declined by a bank, it may not be a good experience for you. You may also feel bad. However, do not be discouraged. What needs to be done is a careful analysis of the possible reasons for rejection. Although most banks do not disclose the reason, the most common are low credit rating, insufficient income, high existing debt, etc. So, once the request is denied, follow these steps to ensure that your next request is accepted by the bank:

1. Analyze your credit report

When your credit card application is denied, the first thing to do, if you haven’t already, is to get your credit report back. Today, consumers can easily get their own credit report online instantly, with no impact on the score.

Once you get your credit report, analyze it carefully. A credit score below 750 needs work. Low credit scores are the result of bad credit behavior in the past, such as late payment of IMEs or credit card bills, failure to pay full amount outstanding, high debts, etc. Also, look for any discrepancies or errors in your credit report. If you spot any, contact the office immediately.

2. Build your credit score

You should use your credit report as a starting point to improve your credit score. Do your research online to understand the steps necessary to achieve a high credit score. This is generally good credit behavior: paying off your IMEs and overdue credit card bills on time, ensuring that you don’t regularly use more than 40% of your credit limit on your cards existing credit, have a good balance between secured and unsecured loans, not have a high debt stock, etc.

A key factor in building your credit score is to monitor it regularly. Even with good credit behavior, it takes a few months for your credit rating to start gradually improving. Therefore, monitor your score every month and stay patient while building it.

3. Apply to online loan market for the right match

One of the biggest mistakes consumers make is applying for credit from the wrong lender. Each bank has its own eligibility criteria for credit cards and different types of loans. Therefore, it is important that every consumer knows which bank might be willing to extend credit to them.

Consumers often apply to multiple lenders for a product. It should be noted that each and every request is recorded in your credit report as a serious investigation, and too many serious inquiries in a short period of time can make you feel like you are “greedy for credit”. what banks consider risky.

You must use the online financial marketplaces to apply to multiple credit lenders. This is considered an inquiry and has no effect on your credit score and your credit card application. Marketplaces would also help you find the right bank and the right credit card, depending on your eligibility and needs.

4. Get a secure credit card

If you are in urgent need of a credit card, one option that you can choose is the secured credit card. Secured credit cards are only issued to your fixed deposit account with the respective bank. There is minimal documentation required for secured credit cards and they are usually issued without any issues. The credit limit on secured cards is usually a certain percentage of the principal amount in the fixed deposit account.

The secured credit card is an alternative to the standard credit card when you have a bad credit rating or when you are new to credit. A secured credit card can help you improve your credit profile and boost your score for future applications.

(By Sahil Arora, Head-Payment Products, Paisabazaar.com)

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