Tips To Keep In Mind Before Reapplying After A Credit Card Rejection

When used in a responsible manner, a credit card can offer multiple benefits and rewards to an individual. It is a type of unsecured loan that allows you to use funds to make payments which you can pay off later on. Most major banks have a variety of credit cards ranging from super-premium to entry-level based on the requirements and income of customers.

Almost everyone, especially those who just started their professional life, desire a credit card for themselves. Now, credit card approval depends on multiple factors and it can get frustrating if your application is rejected by the card provider. If you have experienced this before, we will talk about some tips to remember when you reapply after getting rejected for a credit card.

Before that, lets take a look at some common reasons of credit card application rejection.

Reasons Behind Credit Card Rejection

There are multiple factors considered by banks and card issuers when they process a credit card application by an individual. Here are the most common reasons that lead to rejection –

Poor credit history and low credit score – Every financial institution will check your credit report and if you have a low credit score, the chances of approval go down. The score tells the issuer about your credit utilization and repayment ability. If your credit report has a late payment then your score will go down and it will be difficult to get approved for the card. Even if you get approved with a low credit score, you will get a lower card limit and will have to pay high interest rate.

Unstable employment – Card providers look for people who have a stable job and earn a decent income. If you are someone who changes jobs frequently, for example, in 3 to 6 months, then it will have a negative impression. They will get an impression that you are not a dependable and stable person which reduces your chance of getting approval.

Not meeting eligibility requirements – Different credit cards have different eligibility requirements and an individual must meet them when applying for a card. Usually, card issuers reject applications when a person does not meet the minimum income or age requirements. Rejection can also happen if the required documents are not provided.

Already have credit cards – Your credit report tells the card issuer how many credit cards you have, your credit utilization ratio, and repayment history. If a person has many credit cards or is irregular with repayment, then it is possible that the card issuer rejects the application.

Tips to Consider when Reapplying After Credit Card Rejection

Many individuals get their credit card application because of different reasons but it is not the end of the road. You always have a chance to reapply and you must take the necessary steps to ensure that your application is approved this time. Here are some tips that you should keep in mind –

Wait Sometime Before Reapplying Again

If your credit card application gets rejected, do not apply again immediately. Wait for a certain period of time else you will face rejection again. There is no fixed waiting period and it varies for everyone based on factors like income, credit score, etc. Experts believe that you should wait six months or more before applying again.

Understand Reason Behind Rejection

When your credit card application gets rejected, make sure to consider it thoroughly and find out the reason behind it. This will help you prepare better for the next time you apply. If you had a low credit score, work on improving your credit score.

If you didn’t meet eligibility requirements, apply for a card that you are eligible for. If you were rejected because of delayed EMIs and payments, pay all outstanding dues and card bills for a better chance of approval next time.

Regularly Check Your Credit Report

Every card issuer will analyze your credit report when you apply for a credit card, so you must check your report before submitting your application. If there are any late payments records, try to get them removed by speaking to your lender.

If the score is low, you should work on improving it before you apply for the credit card again. Also, if you come across something wrong or inaccurate in your credit report, you should file a credit dispute to get it corrected.

Improve Your Financial Ability

You may have been rejected because your monthly income did not meet the minimum required. You should work on getting a better job so that you earn more money. Also, you should try to repay all due loans or existing credit card bills to have a better chance of getting approved. If you have ongoing debts then the card issuer will hesitate in approving your application.

Go Through Credit Cards and Choose the Right One for Your Needs

It is possible that you applied for a credit card that does not suit your requirements and needs. Some super-premium cards are meant for high net-worth individuals while some entry-level cards target young professionals who just started their professional journey.

Go through multiple credit cards, check their eligibility requirements, offers and benefits, and terms and conditions so that you can choose the best credit card for you. The chances of approval increase when you go for a card that suits your financial position and has less strict requirements.

Bottom Line

A credit card symbolizes a stable financial position of a person and helps out a lot in times of need. Also, there are so many options out there that offer the best rewards, benefits, and offers to customers in different categories like super-premium, shopping, travel, fuel, lifestyle, etc.

There are many people who face rejection when they apply for a credit card. Try to maintain a high credit score with timely repayments of your EMIs and credit card bills to have a high chance of approval. People with a low credit score or late payment records in their credit report and usually rejected by card issuers and banks. Even if they are approved for the card, they get a lower limit and a high rate of interest.

There is no need to panic if your credit card application is rejected. Just wait for some time, improve your financial condition, increase your credit score, and your chances of getting approved for a credit card will go up.