Advertisement
Singapore markets closed
  • Straits Times Index

    3,224.01
    -27.70 (-0.85%)
     
  • S&P 500

    5,248.49
    +44.91 (+0.86%)
     
  • Dow

    39,760.08
    +477.75 (+1.22%)
     
  • Nasdaq

    16,399.52
    +83.82 (+0.51%)
     
  • Bitcoin USD

    70,569.08
    +529.03 (+0.76%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,960.63
    +28.65 (+0.36%)
     
  • Gold

    2,209.60
    +19.00 (+0.87%)
     
  • Crude Oil

    82.12
    +0.77 (+0.95%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Nikkei

    40,168.07
    -594.66 (-1.46%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • FTSE Bursa Malaysia

    1,530.60
    -7.82 (-0.51%)
     
  • Jakarta Composite Index

    7,288.81
    -21.28 (-0.29%)
     
  • PSE Index

    6,903.53
    +5.36 (+0.08%)
     

Rejected for a Credit Card? It May Not Be for the Reason You Think

Having a credit card application rejected is frustrating, especially if you aren't sure what went wrong.

A recent survey by NerdWallet asked Americans how they feel about credit card rejection and what they'd do if they were turned down. We also asked them to identify some of the most common reasons for rejection -- and found that there are some definite misconceptions.

[See: 12 Habits to Help You Take Control of Your Credit.]

Here are five reasons you won't be rejected for a credit card, and what might really be going on.

1. You have too many credit cards. According to NerdWallet's survey, 35 percent of Americans think having too many credit cards is a common reason for rejection. Actually, the number of credit cards you have matters less than the length of your credit history and how you manage those cards.

ADVERTISEMENT

Applying for a lot of credit cards in a short time -- especially if you recently started building your credit -- can lower your credit scores, which may lead to a rejection. Similarly, having a lot of credit cards with high balances could hurt your credit scores because you're using too much of your available credit. Also, if you can't keep up with all of those cards and keep missing payments, that could hurt your credit and lead to rejection. However, simply having a certain number of credit cards isn't a reason for rejection.

2. Your last credit card application was rejected. One-quarter of Americans think having been rejected on a previous credit card application is a common reason for another rejection. This isn't true: The fact that you were rejected for Card A doesn't affect your application for Card B. But if you don't address the reason your first application was denied, you're more likely to be rejected again for that same reason.

Say you apply for a credit card and are rejected because you have a bad credit score. If you apply for another card without improving your score, you may be rejected again, but it would be because of the poor credit, not the first rejection.

3. You don't work in a job that card issuers prefer. A few Americans (7 percent) think that having a job that credit card companies don't prefer is a common reason for rejection. When you apply for a credit card, you must have the minimum income required for the card, but your job doesn't matter. Whether you're a butcher, a baker or a candlestick maker, your livelihood won't be factored into the decision made on your credit card application.

[See: What to Do If You've Fallen (Way) Behind on Your Credit Card Payments.]

4. Your spouse has bad credit. When you marry someone, you marry many of that person's problems, too. But your credit score is yours and yours alone, so your spouse's credit won't influence your credit card application unless you apply jointly, which isn't typically recommended.

If your spouse has bad or limited credit, you can improve it by adding him or her as an authorized user on a credit card. Authorized users get their own card and can make purchases, but they aren't required to make payments and can't make changes to the account. Basically, an authorized user is piggybacking on the good credit of the primary cardholder. This is a great alternative to joint credit cards if you want to be on the same account, especially if one of you could use a credit boost.

5. You don't carry debt. It's hard to get credit without having credit, but you don't need to carry debt to have a healthy credit score and get approved for a new card. Use a credit card regularly, but avoid charging more than you can afford. Pay it off in full before the due date to keep from owing interest and keep your credit in good shape.

[See: 10 Easy Ways to Pay Off Debt.]

Next steps. If your credit card application is rejected, it's probably because of poor or limited credit or insufficient income -- not the reasons discussed above. Apply for a card designed for people in your credit score range and work on your credit by paying your bills on time, using no more than 20 percent to 30 percent of your available credit, and keeping your accounts open and active for a long time. Then wait -- building credit takes time -- before you apply for your ideal card again.



More From US News & World Report