If a financial company has turned down your credit card application before, you must ensure to avoid those possible reasons of rejection this time. Getting approval for your next application can become easier when you follow a few important steps.
However, before going ahead, first understand the reasons why your application was rejected the last time. Only then can you take the remedial steps and avail a new card in your first attempt.
Why are credit cards rejected?
There are a lot of reasons for credit card rejections. Some of them are very basic and easy to understand while others are technical in nature.
The most common reasons are:
- You made a mistake in filling up the form: Many people miss out to include their past income or employer’s details. Else, there were some errors in documentation. No financial institution issues credit cards to those who have messy application papers.
- Shaky credit history: If you have not paid your bills on time in the past, or have large debts, you won’t get approval even if you fulfil all the credit card eligibility criteria.
- Recent unemployment: Financial companies won’t grant a card to someone who does not have a steady source of income. To avoid this, do not make frequent job changes. Also, apply for a card after spending at least 6 months on your latest job.
What you can do?
Here are 3 ways you can ensure that your next card application passes in the first attempt.
Step 1: Improve your credit history
There are several ways you can do this.
- Clear all your outstanding bills on time. You can even try and settle bills early. This will enhance your creditworthiness and chances of credit approval.
- Lower your credit utilisation ratio. This is the ratio of the credit limit on your existing card and how much you actually use.
- Make sure you hold a healthy CIBIL score of at least 750 (more is always better).
In case you are looking for multiple cards’ features rolled into one, check out the Bajaj Finserv RBL Bank SuperCard. This card is actually a 4-in-1 financial tool.
Bajaj Finserv is a leading NBFC in India and has pre-approved offers on credit cards, personal loans, business loans, and home loans, among a list of other financial services.
Step 2: Find the right card
Various cards offer different features. Try and identify the card which offers you maximum benefits according to your needs and financial habits.
Go to the issuer’s website and check all the essential data and usage details. Find out the credit score requirement. Read the terms and conditions. Apply when you meet all the credit card eligibility criteria precisely to avoid rejection.
Step 3: Never repeat previous mistakes
Now, you know why financial companies reject your application for your mistakes. Don’t throw the rejection letter in the dustbin; instead, read and learn from it.
- Try and avoid application form mistakes.
- Work out all your financial issues beforehand.
- Try and improve your credit utilisation ratio.
- Settle all your outstanding dues. If necessary, take a small loan which will help you consolidate all previous debts.
- Start by using a secured credit card. Build up a strong credit history and then apply for an unsecured one. Be sure to check your credit card eligibility before that.
Always trust your instincts before you apply for a credit card. A careful and considered application process saves you time and ensures that you get approval for your card effortlessly.
By Gaurav Khanna
who is an entrepreneur, digital marketer & writer.