Why your credit card was denied: 10 common reasons and how to fix them

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It can be infuriating if your application for a credit card gets rejected, especially if you were relying on it as a convenience, reward, or a safety net of cash. But understanding why a credit card application has been rejected is the key to the solution.

1. Low credit score

Lenders look at your credit rating to gauge risk. If your credit score is low—typically below 650—it is an indicator of previous problems such as late payments or too much debt. Banks will deny your application, particularly for prestige or unsecured cards.

2. High credit utilization

If you already have cards and you are carrying more than 30% of available credit monthly, it will hurt your score. Over-leveraged accounts will make you appear over-extended and increase the probability of rejection.

3. Inadequate income

Banks usually require a minimum income to process cards. Since they don't report all your income to the bureaus, if your reported income isn't enough to qualify them by their criteria—or won't cover the credit limit you requested—you may be denied.

4. Too many recent credit requests

Every search generates a hard credit pull on your credit report. Numerous searches in a short timeframe sends the red flag that you're credit-starved, and this lowers your approval odds.

5. Short or non-existent credit history

If you're a new user of credit or don't have any history of borrowing loans or using credit cards in the past, banks don't have enough information to assess your repayment habits. Without any credit record, you may face rejection.

6. Inconsistencies in your application

A slight inconsistency in name, PAN number, or address will lead to rejection of your application against an outstanding account. Recheck before applying.

7. Outstanding debt

If you have pending EMIs on home loans, personal loans, or other credit cards, banks might not consider that your debt-to-income ratio is sufficient enough to take more credit.

8. Card defaults or settlements

Any history of a written-off credit card, paid or unpaid account, even years back, is retained in your credit report and will affect upcoming requests.

9. Occupation or type of employment

Certain jobs—like self-employment or an irregular business—are valued at high-risk by some issuers, especially where income is variable or difficult to determine.

10. Excessive bank cards

Banks will normally restrict the issuance of cards to not more than one per customer. In case you already have several cards from the same bank, you will be rejected in a bid not to be over-exposed.