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MANY people experience getting a credit card application turned down, and with the arrival of the credit crunch lenders are tightening up on their approval criteria and less applications are being accepted.
Find out why your application was turned down
If you've had a credit card application rejected the first thing to do is to find out why it was turned down.
You can contact the credit card issuer you applied for a card with and ask them - it's not guaranteed they'll give you a very explanative answer, but hopefully you will be given some idea.
- Application criteria
If you’ve applied for a credit card that is not suitable for your needs and circumstances, for example if you’ve not met the minimum income, age or status requirements you should ideally wait 3 months before re-applying for a more suitable credit card.
Required income and age criteria should be listed on all online application forms usually presented on a page before the actual form itself. This information is also available on each of our listed credit card reviews.
- Credit score
If your application was turned down because your credit score was not high enough, this may have resulted in either an automatic rejection or a referral.
In the case of a referral your application would have been sent to a lending reviewer who would then access your application on a more individual basis and decide whether or not to accept it.
In either case if the end result is still a rejected application then you need to check out your credit score and focus on improving it first.
You can obtain your credit report through online services such as Experian or Equifax – usually they offer a free full access trial of around 30 days.
A number of factors can contribute to a low credit rating, by accessing your credit report you’ll be able to see where problems are arising and to see how you can improve your credit score.
Credit report problems can include mistakes on addresses or credit use – these are easily rectified by contacting Experian or Equifax who will be able to help.
Other possible problems can be missed or late payments on other credit, as well as utility bills, mobile phone bills and overdrafts.
Focusing on keeping up repayments and bill payments can help to improve your credit score. [Find out more about improving your credit score.]
Avoid re-applying too soon
Too many credit applications – especially rejected ones – in a short period of time can damage your credit score as they all leave footprints on your report.
It’s advisable to wait for 3 months between credit applications.
When you do apply for another credit card make sure that you meet the approval criteria for income, age, status and any other requirements they have listed.
If you know your credit score is poor, taking out a bad credit rating credit card can help to improve your credit score, as a good use of credit will be reported on your credit file.
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