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Reasons your credit card application was denied

by , 14 October 2014

Have you recently been denied credit? The reasons for being rejected for a credit card vary. Although the credit card company will rarely tell you why your credit card application was denied, you can determine the exact reasons by performing a quick analysis of your credit history.

Here are some of the most common reasons for being denied a credit card.

1. Your credit cards are maxed out
 
If the available credit on your other cards is maxed out, then you can expect to have your application rejected. Credit card companies don’t want clients who use too much of the credit. Specialists recommend that you use as much as 30% of the available credit. If your credit utilization exceeds that percentage, lenders will consider you a liability, since you’ll be likely not to be able to fulfill your monthly payments.  

2. You don’t earn enough
 
If your income is low, credit card companies are likely to reject your application. You can find out if you’re likely to be rejected by calculating your debt-to-income ratio (DTI). If it’s too high (above 40%), the application is likely to be rejected.
 
3. You have charge-offs on your credit record
 
Having charge-offs on your public credit record will drastically diminish your chances of getting your credit card application approved. The charge-offs appear on your record when the lender has written off the debt you owed as a loss because you weren’t able to pay it in due time.

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4. You have an unstable work history
 
If your employment history shows many inconsistencies and periods of inactivity, then you are more likely to be denied credit. You will be considered a liability, since you may not be able to fulfill your monthly payments. The worst thing you can do is lie about your work history, because credit card companies usually check to see if the applicant is telling the truth.
 
5. You have too many cards
 
If you already have a number of credit cards, you might be refused another one. The maximum number of cards allowed varies, depending on the credit card company. Again, the aim is to keep your credit utilization ratio below 30% and not have more than three-four cards already.


Reasons your credit card application was denied
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