Usually, most people apply for a credit card to manage their finances better with a little extra funds. In such a scenario, having your card application denied can be frustrating. However, a denial is not the end of the road - there are several proactive steps you can approach to make things better for you.
Understanding why your application has been rejected will help you better to take action accordingly and improve your chances of approval in the future. By law, the credit card company has to send you an adverse action notice explaining why they have denied your application. The common reasons behind your rejection might include:
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Low income
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Limited or negative credit history
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Existing debt
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Several recent credit inquiries
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High debt-to-income ratio
Steps to Take to Address Your Credit Card Rejection
Once you know the specific reason which has led to the rejection, you can start addressing them. This may involve steps such as:
Check the Eligibility Criteria of Your Credit Card Company
It is not always necessary that your application has been denied due to your low credit score. Some credit card companies only give credit cards to people older than 21 years. The first step would be checking eligibility criteria and applying for the card based on it in the future.
Improve Your Credit Score
If the reason for rejection is a low score, then these tips will help:
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Develop a healthy repayment habit.
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Increase your income and your credit limit.
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Keep your credit utilisation ratio as low as possible.
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Don’t sign up as a guarantor.
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Don’t go for too many loans.
Check Your Credit Report Frequently
While you are striving to make your credit score better, the only way you can witness the transformation is through your credit report. Regardless of the method you use to increase your credit score, this step remains the same for all.
Find out a free credit score checking app, like OneScore to check your credit score for free. If you are using the OneScore App, you can also plan your credit score with them and take all the measures instructed by the app to reach your credit score goal.
Work on Your Debt-to-income Ratio
If the larger chunk of your income goes to pay your debts every month, this means you have a high debt-to-income ratio. This might directly reflect on your credit score. Lowering this would help you to get a better credit score which will help you to get your credit card approved effortlessly.
Pay Off Your Existing Debt
The rejection report might show you have too many existing debts. The wise option is to pay your debt and then apply for a credit card.
Go for a Secured Credit Card
Lastly, if you require a credit card immediately, then go for a secured credit card. Such cards will enable you to use your fixed deposit as collateral and get credit accordingly. This is one of the best ways to increase your credit score, become mindful about your spending and manage your credit card in the early credit journey.
Going for a secured credit card like the One Credit Card improves your chances of enhancing your credit score with time. Simultaneously, it also gives you access to credit to manage your finances conveniently and gives all the benefits the card has to offer. The card has a virtual variant with which you can immediately start your transactions on approval.
With the card, you will be able to use a full-stack OneCard app, which will help you to encompass each of your payments and transactions with ease. The credit card online app will help you even further if you are willing to work on your credit score. To Get started, apply now for the secured version and begin your journey with this credit card. Once you attain a good score, apply for a regular credit card with confidence.
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