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6 Reasons Why Your Credit Card Application May Get Declined

January 19, 2024 • 651 views

Are you worried about your denied credit card application? A credit card application rejection can sometimes be demotivating. With digitalisation and improvements in banking services, you can apply for a credit card within a few minutes from anywhere and at any time. However, your bank can deny a credit card application. Below are some of the reasons why your application may get rejected: 

Reasons Why Your Application May Get Rejected

1. Poor CIBIL Score

A CIBIL score is three digital numbers representing your creditworthiness. A CIBIL score ranges between 300 to 900. An ideal CIBIL score should be more than 700. If you have a CIBIL score between 300 to 550, it is considered a poor CIBIL score. A poor CIBIL score can lead to the rejection of your credit card application. Hence, you must always check your CIBIL score before applying for a credit card. 

2. No Previous Credit History

A credit history can help lender to understand all the previous credit activities. Similar to a poor credit score, no previous credit history can impact your credit card application. With no previous credit history, a credit card issuer will not be able to evaluate your repayment ability. Hence, there is a higher risk of default in repayment, which can lead to the rejection of a credit card. You can also apply for a secured credit card where you need to pledge collateral security such as a fixed deposit. 

3. Insufficient Income

You should have sufficient income while applying for a credit card. Insufficient income can lead to the rejection of credit card applications. Having sufficient income with you ensures the card issuer's timely credit repayment. At the time of credit card application, a lender demands salary slips, Form 16 documents or income tax returns. However, despite having a sufficient income, you can face rejection of credit cards due to higher DTI (Debt to income) ratios. A higher DTI ratio indicates the majority of income goes into paying debt. You should make sure your DTI ratio is less than 30%. 

4. Unstable Employment

You may face a credit card rejection if you have unstable employment. If you change your job frequently every few months, you can face difficulty in getting credit card approval. 

5. Error in Application Details

It is important to fill in your application details carefully to avoid any errors in the application. Re-check your details before submitting your application. Please ensure all the details such as name, address, income, age, etc. If you have any doubts, please get in touch with the concerned representatives. 

6. Multiple Applications

You should avoid multiple applications with different lenders at the same time. Each time you apply, the lender needs to check your credit score and history to ensure your creditworthiness. This results in lowering your credit score. It is better to apply with one lender at a time. This increases your credit card approval chances. 

Also Read - Do's and Don'ts of Using a Credit Card

What Should You Do After Your Credit Card Application is Declined? 

Now you know why your credit card application declined, here are a few tips after your credit card application is declined. 

  • Know the reason for your denied credit card
  • Read the refusal letter carefully
  • Wait before applying again
  • Apply for a secured credit card 
  • Check for free credit report 
  • Improve your debt-to-income ratio
  • Pay all your credit card bills on time 

Also Read - Credit Card Future in India: What's in Store?

Conclusion

In conclusion, you need to check your creditworthiness before applying for a credit card. All the credit card issuers have different terms and conditions. You must adhere to all the terms and conditions for quick and hassle-free approval. Hence, it is necessary to check and read all the requirements beforehand to avoid any rejection or delay. 

Frequently Asked Questions 

  • What is an ideal CIBIL score for credit card application?

An ideal CIBIL credit card application score should be over 700. It helps you get your loan approved faster.

  • Can we apply for a credit card after rejection? 

Yes, you can apply for a credit card after rejection with the same or different issuer. It is advised to wait before re-applying for a credit card immediately after rejection.

  • What is the processing time for credit card applications? 

The average processing time for credit card applications is 7-10 business days.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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