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Credit Cards

Top 5 Reasons a Credit Card Application Was Denied

August 2, 2021

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 more 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. 

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 "authorised 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 - and a reason to lower your credit score. 

There’s no universal rule, but consider waiting at least 90 days before applying again after a denial. Even better if you can wait six months.

Mistakes in you application form

Card issuers are looking for consistency and, above all, else accuracy. Make sure the most basic information, like your address, your mother’s maiden name or even your full name spelling, are correct and consistent. 

Take your time on your application, and always make sure to 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 a collateral. 

How Bright can help

If your credit score is low, Bright can get you back on track, managing your payments for you, so you’re always on time and actively working to lower your outstanding debt. 

Bright also offers qualified users a personal loan. Use it to pay off your cards, streamline payments at a lower interest rate, and extend your pay off period without compounding your debt. 

Content Team
Bright Money

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