5 Reasons Why Credit Card Applications Are Rejected

After years of using cash for daily transactions, Naveen Kumar, an IT firm employee, decided to get a credit card. He submitted the credit card application online and awaited approval. His application status read ‘pending’ for several days before it was rejected, which was surprising for Naveen as he was a well-paid employee who did everything right to maintain a good credit score. In the dire need to get a credit card, Naveen filed multiple applications with different banks in a short span of time only to be rejected by all of them. Unfortunately, a lot of applicants like Naveen are unaware of the reasons why banks rejected their credit card applications.  So, this blog discusses some relevant but little-known reasons why credit card applications are rejected.

1. Multiple Applications

So, why was Naveen’s application rejected? The applications were rejected because he made multiple applications in a short span of time. Unfortunately, a lot of applicants are unaware of the fact that multiple applications does more harm than good. When someone applies for a credit card, his/her credit report is updated with an inquiry. Multiple applications result in numerous inquiries, which ultimately result in rejection.

2. Late Payments

If you consistently pay your EMIs or credit card bills late, your credit score gets affected. The bank will not accept your credit card application if you've missed a loan or a credit card payment. Late payments indicate that you may default in paying your bills, which makes you a high-risk customer and banks will be reluctant to hand you a credit card. 

3. Low Credit Score

The credit score measures how consistent you are when it comes to paying you’re your credit card bills or EMIs. Banks avoid approving the credit card request of people with a low credit score or who negotiates with a credit card company to pay less than they owe.  

4. Job hopping

While job hopping is necessary for your professional growth, frequent job hopping is harmful. Applicants, who change jobs frequently, such as every six months or a year, are considered untrustworthy. If you change jobs every year, your credit card application will likely be rejected by the bank.

5. Mistakes in the application form

The information requested on a credit card form is critical, and it must be filled out carefully. Missing information or providing incorrect information on an application form can cause rejection. This is why many applicants prefer filling online applications as you will not be able to submit the form if you miss out any of the necessary fields.

Helpful tips to follow when applying for a credit card:

Filling the credit card application can be tricky, especially if you are doing it for the first time. However, the following tips will help you out when applying for a credit card.  

• In case your credit card application has been rejected, wait for a few days before re-applying
• Make sure you know everything about credit card usage before filling the application form.  Opt for a credit card only if you are sure that you can pay the bills on time and will not max out your card
• Opt for a low credit limit initially so that you don’t over spend and get into debt traps
• Understand the concept of Annual Percentage Range before applying for a credit card

Conclusion

Applying for a credit card online is easy because it prompts the applicant to enter the required information, such as the registered mobile number, Aadhar Number, and PAN details, from their home. After the information is verified, the bank issues the credit card in 24 to 48 hours. Applicants should be aware of the above factors to avoid credit card application rejection. If you are planning to apply for a credit card online, check out IndusInd Bank. You can opt for instant credit cards that come with attractive features and reward points. The application process is online and 100% paperless. Begin your credit card journey with IndusInd Bank with simple documentation and quick processing.