Credit cards have emerged as a convenient way to secure funds. Today, many people use the online credit card application service provided by various financial institutions to make purchases.
One reason for the rush to get a card is the different beneficial features. As a result, the credit card base in India touched 61.6 million in February 2021, according to data by the Reserve Bank of India. To eligible customers, institutions offer instant approval on credit cards. But what if your credit card application is turned down?
It can be not very reassuring when your credit card application is denied. Not only were you refused the card you wanted, but you also had a hard credit inquiry denting your credit score. But relax. It is not the end of the world. You can take remedial measures to improve your financial health and other steps to boost your standing. This will help in enhancing the chance of approval the second time around. Here we have compiled a list of actionable tips to consider before reapplying for a second time.
Credit Card Application: Steps to Follow
Today, eligible customers are offered instant credit card online facilities by lenders. However, if your application is rejected, follow the simple steps mentioned below to improve the chances of approval next time.
Review the Rejection Notice to Understand the Reasons
Issuers provide the adverse action notice mentioning the reason for application rejection.
Here are some reasons for rejection:
- Low income
- Limited credit history
- Multiple credit applications
- Negatives on the credit report
- Excessive debt
You are entitled to a free copy of your credit report to check the accuracy of the information. If the rejection is due to a low credit score, you would be aware of the factors that contribute to the low score. You should go over the report and take appropriate actions for the future.
Wait Before Reapplying
Applying for credit cards from other lenders is pointless if your application has been denied. Most likely, you will be rejected by others as well. Additional inquiries will lower your score even further. It is best to go over the causes of denial and focus on them. For example, if the explanation is a low score, you need to improve your financial health. It is better to wait six months before applying again.
Repair Your Finances
Although there are no easy fixes for your finances, consistently managing your money and credit profile are among the best ways to boost your creditworthiness.
Some factors for lousy credit are:
- Unpaid bills
- Delinquency
- High credit card balance
- High credit utilization ratio and more
Use your credit report to understand the reasons and repair your credit. You can increase your credit score by disputing mistakes, clearing up credit card charges, paying off large balances, and limiting the amount of new credit card applications.
Check Your Eligibility
Check the eligibility of the card you are interested in and see if your profile meets the criteria. Compare the cards offered by different lenders based on the credit card charges before taking the final decision.
Apply for the Right Card
It is a good idea to apply for a credit card that reduces your expenses. For instance, you can choose a card with zero maintenance fees, discounts with partner merchants, no expiry of reward points, and low-interest rates.
The rejection of credit card applications is uncompromising and implies poor financial management. Please take it as a challenge to focus on your finances and increase your chances of success on your next attempt.
