You may think of applying for another one. But, it may end up with another rejection if you do not know why the last one faced refusal. It is better to recognise why the company rejected your application and how you can turn your rejection into an approval. So, make sure you choose the right credit card with features that suit your requirements.
Here are the three steps to follow:
Step no. 1: Look for reasons behind the rejection.
Your rejection letter may disappoint you but look at it carefully to understand the reason. There can be many factors responsible for it.
A mistake in your application form
When you apply for credit card, make sure to put all correct information. Providing the wrong information by mistake can lead to rejection of application as the issuing company will not be able to verify the given details.
A weak credit history
You may have defaulted in loan repayments earlier or did not make on-time repayments for any other credit cards that you hold. This will weaken your credit history. In that case, your application is liable to face rejection.
Back to back applications
It may happen that you have applied for credit cards randomly. You may have a proper credit score, but if the companies see too many sudden enquiries on your credit history, it may raise a red flag. It is one of the probable reasons for rejection.
Also, a rejection affects your credit score negatively. So, it is essential to choose the right card before applying.
A low income
It is possible that you have applied for a credit card with a high credit limit, but your income is lower than the company’s requirement.
Recent job switches
If you make a job switch and apply for a credit card within six months, there is a good chance your application faces rejection.
Step no. 2: Strengthen your credit score and history
You need to work on your credit score for assuring that the next time you apply for credit card, it does not face rejection.
Pay your bills on time or before time
Make sure you pay whatever bill you receive, be it utility bills or bills from another credit card on or before the due date.
Keep your credit utilisation rate low
It is the ratio between your credit limit and utilised credit. If you keep a low utilisation rate, it is beneficial for you as the companies issuing credit cards prefer it to be low.
Close any of the existing cards strategically
If you have a high cumulative credit limit, you may want to cut it down as it creates worry among lenders. However, close those credit cards which provide limited benefit. Make sure they are newly issued.
Get a secured card
A secured card will help you improve your credit score.
Step no. 3: Choose the most suitable card
The most suitable card would be the one that provides an all-around benefit. Check your credit card eligibility and apply for one that gives you high reward points, discounts and cashbacks.
You can also avail pre-approved offers on credit cards, home loans, business loans, personal loans, EMI product financing and other financial services. You can check your pre-approved offer by providing a few simple details.
Before re-applying for a credit card, make sure there is a time gap of at least a few months in between the two applications. Back to back applications will not ensure approval. Moreover, if the application is rejected again, it will lower your credit card score and weaken your credit history further.