Today, with so many options available for financial services, it’s easy to apply for a credit card; however, getting approval is not so easy. Banks today offer pre-approved credit cards too, but even in the case of pre-approved credit cards, the creditors have a certain level of standard procedure for which you have to qualify first, and then get a card issued.
Credit cards are a kind of unsecured loans that do not require anything in collateral, due to which the risk factors for creditors increase. This is why they look at factors like credit score, income, source of income, and the number of debts already issued before giving you the approval.
Let us understand some of the reasons for the credit card rejection.
As mentioned above, every creditor has their own standard internal eligibility criteria which the applicant needs to fulfill, to be eligible for the credit card. This is the first and foremost factor that a creditor takes into consideration. This eligibility criterion can be based on your income, source of income, age, experience, and if the applicant fails to satisfy the criteria, the application gets rejected. You can also reach out to RBL credit card customer care for more information.
For instance, if you plan to get the Bajaj Finserv RBL Bank SuperCard, your eligibility criteria include:
- The minimum age of the applicant should be 21 years to a maximum of 65 years
- Minimum monthly income must be Rs. 25,000
- Resident of India
- Add on cardholder’s age must be a minimum of 18 years
The credit score is also one of the primary things that creditors look at. A credit score signifies your financial health and financial management, which is why it’s important to keep the score high. For most of the creditors, a credit score of 750 plus is considered to be good, but anything below that can lead to the rejection of a credit card application. A credit score is affected negatively due to the below-mentioned reasons:
- You maxed out on your credit limit
- You have too many debts
- You have too many credit cards
- You haven’t paid your bills to your creditors on time
- You have applied for a credit card too many times
- You have defaulted on your previous EMIs or previous credit card bills
It’s better to first have a look at your credit score before applying for a credit card because if it gets rejected, that rejection is also reflected in your credit report.
Every bank has a certain income level fixed beyond which they offer the credit card to the applicant, but if your income is too low, or if you are employed at a company with an ill reputation, then there are chances that your application will be rejected, especially if this your first credit card. Your repayment capability is judged by your income by the creditor, and that is also one of the primary reasons to get credit card approval.
No Credit History
One may think that having no credit history is a positive point while applying for their first credit card, but certain creditors don’t think so. Few creditors judge your financial being and creditworthiness via a credit report, and without a credit report, they have no basis to judge whether you are a risk, which can also lead to rejection.
Missing or Incorrect Information
Money is a sensitive matter, hence the application related to it is also sensitive which goes under many layers of scrutiny, and then it gets approved or rejected. Since it’s risky, the creditors need all the information filled incorrectly, and without any omission. So make sure to fill the application form carefully, and not provide any false information.
Existing Debt is High
Even if your credit score is good, if you have too much debt against your name, it can lead to rejection. The creditor considers the debt to income ratio before considering you for approval. This ratio helps the creditors to figure out if you can become a risk for them or not.
So, before you apply for your first credit card, ensure that you remember the above pointers, and do your due diligence. Select a credit card that is right for you, instead of opting for flashy, premium cards.