Why Was My Credit Card Application Declined? Are There Alternatives?
If you are authorized for a credit card, you will usually be notified immediately. But when you are refused, it's an entirely different story.
Being rejected on a credit card application could be disheartening, but it isn't anything you ought to take personally. Issuers of credit cards decline requests for a myriad of factors and knowing the reasons for your scenario should enable you to take the correct measures for future applications.
Continue reading to learn about the reasons why credit card applications are declined, as well as some of the most popular credit card alternatives.
Why Was My Credit Card Application Declined?
1. Low Credit Score
Once you apply for a credit card, the lender may run a credit check to see how you've handled debt in the past. Good credit history and higher credit scores may help you get approved for a credit card. However, based on credit cards, you may have difficulty if your credit score is poor.
2. High Outstanding Debt
Too much debt can make it difficult to acquire new credit, particularly if your debt-to-income ratio is very high. Your debt-to-income ratio compares your debt to your income and may indicate whether you can take on more debt. If this is high, it may indicate that you will have difficulty making the payments due for any new credit.
3. Multiple Inquiries On Your Credit Reports
When you have several difficult queries on your credit report, particularly in a short period, a credit card issuer may be hesitant to approve your application. Frequent credit applications may indicate to the creditor that your financial situation has deteriorated.
4. Insufficient Credit History
Lenders typically review your credit history to determine your creditworthiness, which involves whether you've got a track record of making on-time payments. If you're new to credit, you might not have had the opportunity to demonstrate your creditworthiness yet. Making it difficult to get a credit card.
5. Inadequate Income
A credit card company must ensure that you earn a sufficient salary to cover the required payments on your card. You may not be approved if you do not have sufficient income to make the monthly payments.
6. History Of Late Payments
Because your payment history constitutes the most significant element in your FICO Score, missing just one payment by thirty days or over can harm your credit score and make it difficult to be accepted for certain credit cards.
7. Too Many Credit Cards
The number of credit cards you currently possess might have an impact on whether your credit card form is approved or not. There is no universal number that applies to all applications for a credit card. Rather, it depends greatly on the credit card company.
Are There Credit Card Alternatives?
If you're wondering what credit card alternatives are available, here are a few of the most common ones:
1. Loans From Friends Or Family
Think about asking friends and family for a low- or no-interest short-term loan. True, requesting may be humiliating, and the loan may be accompanied by a lot of emotional baggage. Keep the conversation professional: Have a fully prepared formal contract that specifies every one of the provisions to ensure that both parties know precisely what to consider in terms of cost and return.
2. Payday Loans
Payday or salary loans are online loans that are meant to make the lending procedure easy and fast for practically anyone who needs money immediately. If you need assistance with unforeseen needs, this form of loan can simply bridge the time lag between your salaries.
3. Title Loans
Unlike typical loans, which need a lengthy application procedure, title loans can provide you with cash instantly based on the value of your vehicle, especially if your credit card application was declined.
4. Installment Loan
If your credit card application is declined, installment loans are a simple and fast option to receive extra cash. It takes very little time and effort to get approved for such an installment loan at your local store. For example, Mississippi Title Loans, Inc. offers installment loans of up to $1,250.
The Installment Loan Application Process
Fill out the website's online form.
Wait for a call from a loan agent at the nearby Mississippi Title Loans, Inc. location. Bring your ID, evidence of revenue in the form of your latest pay stub, and a checking account statement in your name to the location after the call.
A representative will assist you through the last stages of the installment loan approval procedure, including the short paperwork after you have verified your needed materials.
If you are authorized, you may receive the funds on the same day.
If your credit card request was denied, you should not reapply for the next card until you've obtained the adverse action letter sent to you and determined the grounds for the refusal. In certain situations, you might well be able to obtain the information straight from the issuer.
Whatever option you pick be sure to consult knowledgeable employees from organizations like Mississippi Title Loans who are in a better position to help find you the best title loan, payday loan, or installment loan. This will allow you to have the cash you need as soon as possible, without worrying about getting your credit card application declined.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.