Interestingly, India ranks high when it comes to the number of credit card users. According to a survey by ‘TransUnion global research’, 92% of the users even have a habit of paying a higher amount than the minimum due on their bills. Yet, a substantial number of credit-inactive people exist in the country.
The primary reason for this dormant condition is the denial of card applications. A credit card company may reject an application on several grounds. Lenders follow specific eligibility criteria for individuals who apply for credit card online. They inform right away when it comes to approval. However, the issuers may not notify the exact reasons when an application gets rejected. Therefore, many credit-inactive people are deprived of using this beneficial mode of payment.
So, know how to avoid any chances of rejection.
Table of Contents
- 10 reasons behind credit card application rejections
10 reasons behind credit card application rejections
1. Burden of debt
Debt burden of an individual is gauged by the ratio between the gross monthly liabilities and his/her total income. It is a vital tool used by many financial institutions to evaluate an applicant’s financial portfolio.
Lenders take account of credit card monthly payments, auto payments, etc. and divide them by the entire salary. People can face rejection if the ratio is above 50% when they apply for a credit card online. The card company considers such applicants as potential risks to award their credit cards.
2. Poor credit score
This is another crucial factor lenders usually go through at the time of approval. A good credit score reflects an applicant’s creditworthiness and his/her repayment capabilities. Financial institutions typically seek for a minimum score of 750 before issuing a card. The application will face outright rejection if the score is below this.
3. Lower income
The companies also gauge the applicants’ monthly income. Usually, they don’t advertise the adequate income as various aspects come into the picture. Hence, they ask for individual’s salary slips, IT returns and employee certificate. Often applications get rejected if the incomes don’t match the lender’s expectations.
4. Multiple enquiries on credit report
Applying for multiple credit cards over a short span adversely impacts an individual’s credit report. Borrowers hurt their score every time lenders ask for hard enquiries on their behalf. Moreover, several enquires impart an image of a credit-hungry person. Thus, there’s a high chance of rejection if people apply for a credit card online too frequently.
5. Too many balance transfers
Multiple balance transfers negatively influence one’s credit management capability. So, taking advantage of this facility more often can lead to a denial.
Credit cards are not sanctioned to applicants who are below 18 years or above 60 years. This is because there’s a lesser chance of regular monthly income at these ages. However, financial institutions like Bajaj Finserv offer cards to an individual between 25-65 years.
They also provide pre-approved offers on credit cards along with home loans, business loans, personal loans and a lot of other financial products and services. This feature with its simplified steps makes the process of finance availing faster, thus, saving a lot of time. Check your pre-approved offer by entering a few necessary details online.
7. Error in an application form
Missing/errant information on the application form can act as a detrimental factor too.
8. Unstable employment history
Credit card application can face a rejection right away if someone is frivolous with the job. Several job switches can inhibit the process to a greater extent.
9. Serious delinquency
An applicant is considered delinquent if he misses monthly bill payments. Credit bureaus keep an eye on such individuals, and it’s highly unfavourable if they fail to pay the bills consecutively.
10. Lack of fund for F.D. in case of a secured card
People who are already in debt are eligible to get a secured credit card. However, if they can’t pledge a fixed deposit as collateral, the application is rejected straight away.
However, applicants can increase their chances of approval when they apply for a credit card. Timely payment, improved credit score, and clean credit reports can give borrowers an instant approval.
So, before you apply for a Bajaj Finserv RBL Bank credit card online, you must amend the factors mentioned above. With creditworthiness and research, you can get high-end co-branded cards like Platinum Plus Super Card embedded with beneficial features.