Getting your credit card application approved can be hard if you are an applicant with a low income, no credit history, or a limited credit background. There might be a high chance that your credit card application might get denied. Therefore, it makes it increasingly important to understand what to do once your credit card application gets denied. In this article, we have provided you with some essential things you can do in order to get your credit card application approved. Given below are some essential measures you should take to try to work in case your credit card application is rejected.
Analyze Your Credit Report
Credit reports are a great way to make an assessment of your creditworthiness. In case, when your credit card application gets rejected, you can apply for a free credit report and make the necessary evaluation to understand what went wrong. Credit reports are detailed statements of an applicant’s credit history based upon which a credit score is issued. It consists of information about an applicant like the nature of borrowings, date of the loan, payment history, current account balance, and any defaults.
Through analyzing your credit report it will give you a better understanding of your financial situation. In India, CIBIL, Experian, Equifax, and CRIF Highmark are major credit bureaus that provide credit reports to individuals. You can get your free credit report from CIBIL or Experian and make the necessary evaluation.
Here below are mentioned some steps to follow to get your CIBIL or Experian credit card.
Step 1: Create your username and password and enter your name, email id, and mobile number
Step 2: Enter your personal details
Step 3: Authenticate Your Account via OTP verification
Apply for Secured Credit Cards
If you are an individual whose credit card application got denied or you have a poor credit history or no credit score, applying for a secured credit card would be the right choice. Secured credit cards are issued by the banks to their customers against a fixed deposit. The credit limit of your secured credit card is set as per the fixed deposit amount with the bank. Usually, banks provide a credit limit of 75% to 85% on fixed deposit amounts on secured credit cards.
The approval process in the case of secured credit cards is easier and hassle-free compared to traditional credit cards. Besides that, secured credit cards charge lower interest fees which is another added benefit of owning a secured credit card. A secured credit card can be used as a financial tool in order to build a credit background and attain your financial goals.
Wait Before You Re-Apply
One thing you should do after your credit card application got rejected is to wait before you apply again. Ideally, it is recommended to wait up to 6 months before you apply again. The more frequently you apply the more inquires will generate on your credit report. Inquiries are of two types hard inquires and soft inquires.
Hard Inquiries are conducted by the bank or any other financial institution when you apply for a loan or credit card after receiving an application from you. The soft inquires are those when you just check your credit report to make an evaluation of your creditworthiness. Soft inquires are not reflected on your credit reports.
A high number of inquires on your credit report affects the credit score of the individual. Therefore, it is advised for you to wait before you re-apply to increase your chances of approval on your credit card.
Fix your Credit Background
One of the most important factors, why your credit card application might get rejected is due to your limited credit background and bad credit history. In such a case, you are advised to rebuild your credit history from scratch. One of the easiest ways to rebuild your credit is to pay your outstanding bills on time. Another way, you can repair your credit is by disputing any remarks wrongly mentioned in your credit report. The abovementioned measures can help you repair your credit considerably.
Applying For the Right Card
Choosing the right credit card for yourself is important for getting your application approved. For instance, an applicant who has just started with his credit journey or whose income is less, should not apply for a premium card whose criteria is high. Therefore, it is essential for you to select the right card that may suit your preference and financial situation.
So, these are some simple steps that might help you increase your chances of getting your credit card application approved next time around. Using this piece of information, you can begin your credit journey and find the right card that suits your needs in order to achieve your financial goals.