Faced a Credit Card rejection? Don’t worry! There are ways to handle it. Read on to know more.
Did your Credit Card application get rejected recently? Aww! Look at you! We understand it’s disheartening. But like always, we’re here with a good news. It’s not the end of the world. Throw that sadness away and stop sulking because no matter how deep those Credit Card rejection wounds are, we have a first-aid kit ready for you. Don’t believe us? You’ll see the kit soon. Before we start telling you more about how to heal those wounds faster, you need to understand the cause.
Additional Reading: Credit Score vs Credit Remarks: Which Matters More?
You need to understand the reasons that led to your Credit Card rejection. That’s the only way you can avoid facing the same issue in the future. So, stop cursing your luck. Here are the real reasons that application got declined:
Too much credit?
If you’ve taken on a couple of loans or have a lot of unpaid Credit Card dues already, there are high chances that your latest Credit Card application will get declined. Why? Well, before a bank or financial institution decides to extend credit to you, they assess your ability to pay back your debts. If you already have a lot of debt, the chances of you being eligible for more credit will drop.
Poor Credit Report
Are there too many inquiries in your Credit Report? Well, that definitely spells trouble. Are you clueless about how it happened? We’ll tell you. Applying for a number of Credit Cards within a short span leads to multiple inquiries in your Credit Report. Too many inquiries will make it seem like you’re credit hungry. To ensure that your Credit Card applications get a green signal, space out your applications for new Credit Cards and loans.
Additional Reading: How To Correct A Late Payment Record On Your Credit Report
Low income
According to the Credit Card issuer you choose, the income criteria is likely to vary. While some issuers might demand more, some might be satisfied with a lower income. According to the Credit Card you apply for, your income needs to be above a certain limit. If that’s not the case, your application might get rejected. Therefore, it’s essential to apply for cards according to your income. You can check what Credit Cards you’re eligible for on BankBazaar. Just click here.
Additional Reading: Credit Cards If You’re Earning Less Than Rs. 20,000 Per Month
Incorrect application
Incorrectly or incompletely filling that Credit Card application won’t do you any good. Nobody will ever accept your application unless the information in it is accurate. So, be diligent when filling up your Credit Card application. It’s way better than crying about a rejection later, isn’t it?
Too many job switches?
Constant job-hopping might not exactly work in your favour. Not being able to stay at a job for some time (at least) portrays you as an unreliable person (credit-wise). These constant job switches can give you a hard time when it comes to getting your Credit Card applications approved.
What should you do if your Credit Card application has been rejected?
Facing a Credit Card rejection is like getting wounded. We understand that you’re hurt. Exactly why we have a first-aid kit handy for you. Here are the main components of your first-aid kit:
Dettol: Check Your Credit Score Regularly
You might wonder why we have compared checking your Credit Score regularly with Dettol. What happens when you apply Dettol to your wounds? It burns! That’s exactly what happens when there are frequent hard enquiries on your Credit Score. Each time you apply for a loan or a Credit Card, banks check your Credit Score. This counts as a hard enquiry and can lead to some points getting deducted from your score. ‘Then why check it regularly?’ Is that what you’re thinking? Just like you can’t skip cleaning your wounds with Dettol, you can’t skip this step either. But the good news here is that a soft enquiry i.e. you checking your own Credit Score doesn’t affect it at all.
You can now check your Experian Credit Score on BankBazaar anytime, anywhere, on the go. And the best part? You can check it as many times as you like without worrying about your score dropping!
When your Credit Card application has been rejected, there are high chances that it happened because of a poor credit history. Precisely why you need to keep a constant check on your Credit Score. Unless you know what’s going wrong and where, you can’t rectify your mistakes. So, don’t forget to check your score!
Burnol: Debt Consolidation
Juggling too many things at a time could cause a lot of problems. Be it trying to light up too many firecrackers all at once or handling too many loans and other credit. You might suffer burns. Well, not literally, but facing money troubles is no less than feeling the pain of third-degree burns after all. In case you’ve already got these burns, don’t worry. You can treat them using Burnol. Oh! We mean debt consolidation. Keeping a track of so many loans, EMIs and Credit Card bill payment dates is not an easy task.
Missing these payments because you have a lot on your plate or due to carelessness is easy. All those late payment penalties will end up burning a hole in your pocket. That’s when debt consolidation will help heal those burns. Debt consolidation means taking one large loan to settle all the existing smaller ones. How’s that helpful? Instead of keeping a track of all those separate EMIs, you just have to think about paying one EMI on time. That simplifies a lot of things, doesn’t it? That’s why debt consolidation forms an important part of your first aid kit.
The most important thing to keep in mind before applying for a loan is that you need to look for an offer that has the minimum rate of interest. Once you have that, everything else just falls in place.
Psst… if you’re looking for the right Personal Loan, you can find some amazing, customised offers on BankBazaar!
Crutches: Strike a balance
If you have broken a limb before (especially a leg), you’d know the struggle! Well, being in a financial mess and facing a Credit Card rejection can leave you crippled as well. That’s when paying off all your unsecured debt first can help. Why unsecured debt first? Unsecured loans tend to have a more adverse effect on your Credit Score. And since you’ve already faced a Credit Card rejection and damaged your golden number, it’s better to not risk it any further.
Paying all the other secured debt off should be on your mind too. But it’s always better to start with the unsecured loans first. It’ll help you strike a positive balance and help you stand tall on your feet, financially and otherwise. Instead of blindly relying on the possibility of winning a lottery and getting a lot of free cash to pay off these loans, it’s better to plan things. If you have any existing investments that are about to reach maturity, like Fixed Deposits or even a Recurring Deposit, now’s a good time to think about using them to pay off your debt.
Tweezers: Pick out the unwanted credit from your life
Tweezers are an important part of the first aid kit. Whenever you get hurt, they save you from infection by helping you get those splinters out of your wounds. Picking out unwanted credit from your life (no matter how small it is) has the same functionality. This small unwanted credit is like those tiny splinters that get stuck in your wounds and have big and adverse infections later. If you let any credit pile on, eventually, it’ll disrupt your financial life. You don’t want that to happen.
Facing a Credit Card rejection is a sign that you need to focus and work on your financial life. There are some things that need to be taken care of and throwing unwanted credit out of your life is one of them. Doesn’t matter even if it’s just a small amount you borrowed from a friend, the sooner you return it, the better it is. Why let these small things become the cause of another Credit Card rejection later in life?
Rejections are never easy to handle. Be it in your personal, professional or financial life. There are ways of avoiding them. But in case they’re unavoidable, you can still figure out ways to face them well. Time heals all wounds. That’s what they say. But you still need a first aid kit to fix things time can’t.
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