Top 5 Reasons A Credit Card Application Gets Denied
Low credit scores, age or income requirements, and too many applications can lead to rejection.
A denial on a credit card application is not the end of the world. In 2020, about 21% of credit card applications in the US were denied, and for consumers between 24 and 39 years old, the rate was closer to 19%.
The reasons for a denial are usually clear and, with a little work, can be remedied. Here are four common reasons and ways to fix them.
Low credit score
More credit card issuers look at your credit score to determine how much credit to offer you and what interest rate to charge.
Your credit score takes a hit every time you miss a due date on a payment, use too much of your available credit, apply for a lot of credit over a short time span, or default on a loan or an existing card.
To raise your credit score, be mindful of due dates and outstanding debts. Pay your bills on time, clear any unpaid debts, dispute inaccurate charges and stop asking for new loans or cards for a while.
Factors affecting credit scores.
Underage application
Most card issuers require applicants to be at least 18 years old. Applicants between 18 and 20 years old will also encounter stricter verifications, requiring validation of an independent income and the ability to repay offered credit.
If age restrictions are an issue, you can apply as an “authorized user” with the help of an adult, typically a parent or guardian, who will be responsible for your debts if you fail to pay them.
Multiple applications
Every credit card application registers as a separate inquiry, and many card issuers consider 6 inquiries within 90 days to be too many — a reason to lower your credit score.
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There’s no universal rule, but consider waiting at least 90 days before applying again after a denial. It's even better if you can wait six months.
Mistakes in your application form
Card issuers are looking for consistency and, above all, else accuracy. Ensure the most basic information, like your address, mother’s maiden name, or even full name spelling, is correct and consistent.
Take your time on your application, and always double-check your details.
Low Income
Credit card issuers set a minimum income requirement for applicants. You’ll have to submit verifying documents, like paycheck stubs or recent tax returns, to prove you’re in the salary bracket for that particular credit card.
Fortunately, credit cards come in all shapes and sizes, with a wider range of qualifying parameters. Look for one that fits your income. Unsecured cards are a popular alternative, too: they often don’t require a security deposit or collateral.
How can Bright help
If your credit score is low, Bright can get you back on track with Bright Credit Builder and Bright Balance Transfers. They’re smart alternatives, with competitive rates and built-in automation.
Bright Credit Builder is an easy way to boost your credit score. Once you’re signed up, we’ll set up an interest-free, secured line of credit and use it to make automatic payments on your cards, building a positive payment history and lowering your credit utilization. Bright Credit Builder focuses on utilization and payment history because your credit score goes up as it improves!
Bright Balance Transfer offers a low-interest line of credit designed to pay off card debt fast while saving you from high-interest charges. Once approved, Bright uses your Bright Balance Transfer funds to pay off your high-interest cards, moving those debts to our balance transfer program with its lower APR. Over the months ahead, Bright automates your new repayments, too, so you pay less interest, and it’s hassle-free. Bright Balance Transfers offers credit lines of up to $10,000 at APRs starting from 9.95%, depending on your eligibility.
Bright can also help you become debt-free by managing your card payments. With a personal Bright Plan, we’ll use our patented MoneyScience™ to study your finances, learn about your debt, and make smart payments, always on time and optimized to save you money.
If you don’t have it, download the Bright app from the App Store or Google Play. Connect your checking account and cards, set a few goals, and let Bright do the rest. With a personal Bright Plan, you can apply for Bright Credit Builder or Bright Balance Transfer or use MoneyScience™ to pay off your cards fast.
