Know Your Rights

Blog
Why Are You Getting Denied Credit Cards?

As a responsible consumer trying to build your credit, you apply for a credit card with a low finance rate and you plan to pay off the balance in full every month.  After all, one of the first rules of thumb for building your credit is to have a positive credit history.  The only problem is, you cannot seem to get approved for a credit card that is desirable.  Let’s look into the reasons why.   

Reason 1 - Too Many Other Credit Cards:

The most common reason that consumers are rejected from opening up a credit card is because he or she already has too many credit cards.  When you submit an application for a credit card, the bank looks into your credit report.  Based on the information in your report, the bank may approve or deny your application.  If this is the case, you may want to look into paying off your balances and closing a few of your cards.  Choose to keep the cards open that have the most favorable interest rates and terms.  

Reason 2 - Outstanding Debt:

If you have multiple accounts open with large balances, a credit card company is more than likely going to decline your application.  Try to pay off as much of your debt as possible or try consolidating your debt to make it easier for you to pay.  A credit card company is not going to want to take a risk and extend a credit card to a consumer who already has a large amount of debt that he or she has not or cannot pay off.  

Reason 3 - Lack of Credit History:

If you do not have a lengthy credit history, banks may be left to guess whether or not you will be a responsible consumer and make timely payments.  Most credit card companies want to be sure about who they are issuing a credit card to and a lack of credit history may leave the bank wondering and be forced to deny your application.

Reason 4 - Insufficient Income:

Often times banks will look into your income to determine whether or not to approve your application.  The rule is simple, if you don’t earn more than a specific amount per year, you will be rejected for certain credit cards regardless of what type of consumer you are.

Reason 5 - Previous Bankruptcy Filing

Many credit card companies will not even consider your applications if you have a prior bankruptcy on your credit file. Bankruptcies are listed on your credit report for 10 years from the date of discharge.  Some, however, are looking specifically for someone who has filed bankruptcy to make an offer to help restore your credit with a new card. 

These reasons aside, if you need to get approved for a credit card, there are options.  First, find out why you were rejected.  Under the Fair Credit Reporting Act (“FCRA”) you are entitled to find out why the lender rejected your application through an “adverse action” notice.  This letter entitles you to find out the name of the credit reporting agency that was used to make a decision and the reason why you were declined.  You are entitled to obtain a free credit report with a denial letter.  A denial letter is like a free pass for a credit report from the credit reporting agency that supplied the report for the application. 

If you believe your rights have been violated under the Fair Credit Reporting Act and would like the advice or assistance of counsel, contact SmithMarco P.C. for a completely free case review.

+ Add CommentNo Comments
Name (required)
E-mail (will not be published) (required)
Want to share a link?
Comment