7 things that could prevent a credit card application approval
When we hear all the statistics about how much money people owe, you'd think that anyone can get a new credit card anytime. But the truth is that not everyone gets approved all the time. Here are just a few reasons why:
- You already owe too much: If you already have a lot of outstanding loans, lines of credit, or credit cards, it’ll be harder to get more.
- You've been seeking new credit in multiple places recently: This is known as credit-seeking behaviour, and it can raise a red flag. The first question the potential lender will be thinking is: why has this person been so focused on getting access to new credit? Do they foresee a problem?
- You might not meet the requirements of the card you're applying for: While your credit score may be fine, some cards have additional criteria you need to meet in order to qualify, such as an income above a certain amount. For example, if a certain card is only offered to individuals with incomes over $100,000 and your income is $50,000, you can have a perfect credit score and still not get approved.
- You may have an unstable employment history: Lenders like stability. So if you're new to the workforce, have a history of changing jobs often, or recently went from a salaried position to self-employment, your odds of getting approved can be lower.
- There may be mistakes in your credit file: It's possible that you don't get approved because your credit file is in poor condition, but YOU may not have been the person who did something wrong. It could be that a simple clerical error was made, and it's possible you've unknowingly been a victim of fraud. Make sure to check your credit files on a regular basis for accuracy.
- You don't have much experience borrowing money: If you're new to the country, young, or haven't used credit very much before, it can be harder to qualify. It's a bit of a catch-22 in that you need to get credit in order to demonstrate that you can handle it properly. In this case, the lender might offer you a lower limit than you applied for, or you can seek a different card with lower limits.
- sometimes lenders will just lend out less money in general: Depending on the economy and that particular lender's business, a decision can be made to loosen, OR TIGHTEN, how much credit they make available.
So remember, it's possible to have a lower credit score and still get approved for a credit card, and it's also possible to have a higher credit score and not get approved for a new credit card.