Top Reasons Why Your Credit Card Application Was Rejected

Credit cards are the most convenient means of paying for purchases nowadays. Even if you make a high-end purchase, you can use your card and make the actual payment later. Further, credit cards allow users to access various cashbacks, discounts, and reward points. This means one can make the most of one’s credit card while adding to one’s savings.
These additional features add considerably to the savings of the individuals. Moreover, proper use of credit cards by timely repaying the dues enables users to strengthen their creditworthiness. This advantage is of particular significance to first time users of credit cards.

However, there are times when a credit card application gets rejected because of the following reasons:

1.Low credit rating

Financial institutions readily approve the application of an individual having a credit score higher than 750. This is because such high scores are proof of the solvency of applicants.

However, individuals with lower credit ratings run a risk of getting their applications rejected. The possible reasons for this could be:

-Multiple debts.
-Not paying EMIs on time.
-Default in repayment of previously-taken loans.
-Multiple credit card applications with various lenders.

A credit card application might run into a speed bump even if there are no previous loans. It is because lenders do not have a track of the applicant’s credit scores, due to the absence of credit history.

In case of first-time applicants, who’ve just begun earning, financing institutions require proof of income to be sure of their capabilities to make timely repayments of their dues.

2.Income and occupation

Apart from a solid credit score, financial institutions also require individuals to have sufficient income. Income stability ensures that applicants can make their repayments on time.

Also, institutions look for stability of applicants’ incomes. That is, individuals with a stable source of income are better equipped to make timely payments of their dues.

Consequently, the occupation of the prospects becomes a vital qualifying criterion for approval of credit card applications. Financial institutions prefer individuals to have a profession that provides stability of income.

Therefore, company reputation becomes an essential factor for evaluation of a credit card application. Furthermore, unstable employment history also has a negative impact on these applications.

3.Multiple credit cards

Another reason why credit card applications get rejected is due to an applicant having numerous credit cards. Lenders consider prospects to be reliable only if they have a safe debt-to-income ratio. Many credit cards imply a high income outflow, which in turn, negatively impact a credit card application.

4.Errors in the application form

Credit card applications also get rejected due to errors in filling the application form. Individuals must be careful while providing the details in their forms. This is one reason for the popularity of online applications. Online applications are less prone to mistakes since they prompt the applicant to fill in the details whenever they sense an omission.

Lenders like Bajaj Finserv offer credit cards that have industry-first features. The RBL card in association with Bajaj Finserv has a SuperCard with features of four cards in one. Plus, these cards charge no interest on cash withdrawals from ATMs. The only charge they levy on ATM withdrawals is a bare minimum processing fee, which is very less compared to the charges imposed by other financing institutions.

Also, Bajaj Finserv provides pre-approved offers for its existing customers on products other than credit cards like home loans, personal loans, EMI financing, etc. Such proposals simplify the financing process like never before, thereby allowing customers to access the loans at the earliest. Customers only have to provide their a few essential details to obtain their pre-approved offers.

How must individuals ensure the approval of their credit card applications?

In case you have a poor credit rating, you must first clear all your outstanding dues before making a fresh application. Repayment of dues serves to increase your credit rating, and therefore allows the approval of credit card applications.
Further, individuals must provide institutions with complete details of their income and employment. Transparency of information also influences sanctioning of credit card applications positively.