Credit card application rejected? here’s why

0
All credit cards come with their own minimum income requirements that must be met in order to seal their approval. (Illustration: SHYAM Kumar Prasad)

A friend tells you about this particular credit card and you are in awe of its benefits: a 10% cashback at your favorite supermarket is something irresistible, you think. You quickly apply for the same card. But then you get an email stating that your request has been rejected. But why was your application rejected? Here are some likely scenarios that often lead to credit card application rejections:

Applying for bad credit card
All credit cards come with their own minimum income requirements that must be met in order to seal their approval. Therefore, carefully review all eligibility requirements (like income requirements, age, etc.) attached to a credit card before applying.

Your credit rating is low
You can meet all of the eligibility requirements, but your credit score is below 750. A good credit score is a sign of your creditworthiness and always works in your favor when you apply for credit (such as a credit card). , a personal loan, loan, etc.), not only to make sure you get approved, but also to get it with favorable repayment terms, such as lower interest rates. If your credit rating is low, work on improving it by erasing all your existing dues (loan repayments, credit card payments, etc.) and try to never miss a single repayment again. Disciplined repayments and keeping a credit utilization ratio below 30% are sure ways to improve your credit score.

You made a mistake in your application
Make sure that all the details related to your credentials and important documents are correctly filled in the application form. It is best to apply online so that you don’t miss filling in important details. Make sure you have the necessary documents such as proof of address, salary statement, bank statement and ITR documents.

Your residence is in an unserved area
It is not uncommon for banks to reject a credit card application if the applicant’s residence is outside their scope. That being said, you are unlikely to find a few banks that are not doing business in your area. It is wiser to stick to these when choosing a credit card.

Look at your requirements
Compare all of your options and try to opt for a card that maximizes the value of your favorite spending. But also check riders (like minimum expenses required to get desired benefits, annual fees, etc.). Never go over your monthly budget by spending too much on your credit card just to get extra reward points or maximum cash back. This can lead to an accumulation of debt.

Avoid too many apps
A rejection of an application does not mean that you will promptly request all other available card options. If your first application was refused due to your bad credit rating, you could also be rejected for other cards. And it can hurt your credit score even further. So wait for your next credit card application until your credit score improves.

Additional credit cards
If someone in your family uses a credit card, you can check with them to see if they can get an add-on card for you linked to their card account and credit limit. Complementary Cards offer the same benefits as the Primary Card, but they should be used responsibly so as not to inconvenience the Primary Cardholder.

The writer is CEO, Bankbazaar.com

Get live stock quotes for BSE, NSE, US market and latest net asset value, mutual fund portfolio, see the latest IPO news, top IPOs, calculate your tax Using the income tax calculator, know the best winners, the best losers and the best equity funds in the market. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay up to date with the latest news and updates from Biz.



Source link

Leave A Reply

Your email address will not be published.