Credit card application denied - Here are the tips to follow before you apply
You applied for a credit card and your application got rejected. Now what? Having your credit card application denied is no fun. Hence, what you do after your credit card application is rejected is important for making sure that you don’t hurt your credit any further. We have listed five tips to ensure your next application sails through with the bank:
1. Analyze your credit report: When your credit card application is denied, the first thing that you should do is fetch your credit report. Once you get your credit report, analyze it closely. A credit score below 650 needs work. Low credit scores are a result of poor credit behavior in the past, like delay in paying EMIs or credit card bills or having high debts. Also, check for any discrepancies or errors in your credit report. In case you spot any, get in touch with the bureau immediately.
2. Improve your credit score: If your score is low, follow steps to improve your credit score. Paying off your EMIs and outstanding credit card bills on time, maintaining a good balance between secured and unsecured loans and not having high outstanding debt are a few steps to improve your credit score. A key factor to build your credit score is to track it regularly. Even with good credit behavior, it takes a few months before your credit score starts improving gradually. Hence, keep a check on your score every month and stay patient while building it.
3. Don’t apply for too many cards: Another reason that your credit card application has been denied is that you may have applied for too many cards at the same time. To a card issuer – these multiple applications can be interpreted as a sign of possible financial difficulty. If you have already applied for several credit cards within the past few months, it might be best to wait a few more months before filling out new applications.
4. Maintain a healthy mix of credit:A healthy mix of secured loans (such as home loans or car loans) and unsecured loans will work in your favor. When you consistently make timely payments across different type of loans, it shows you can handle different kinds of credit, and you’re more likely to be deemed as a reliable applicant.
5. Get a secured credit card:If you are in urgent need of a credit card, you have the option to apply for a secured credit card. Secured credit cards are issued only against your fixed deposit account with the respective bank. There is minimum documentation required for secured credit cards and they are generally issued without any hassle. The credit limit on secured cards is generally some percentage of the principal amount in the fixed deposit account. It is the best alternative to a standard credit card when you have a poor credit score or when you are new to credit. A secured credit card can help you to improve your credit score for future applications.
Conclusion: So, before applying again for a credit card, make sure to take a stock of things before submitting your application. Take your time and follow these tips to get your credit card application approved easily.
