Any one of the following could cause a credit card company to reject your application:
- A high debt-to-credit ratio (your total debt divided by your available credit) is grounds for rejection. There is no hard and fast rule for how much credit card debt is too much, but experts advise keeping your utilization ratio below 30%.
- Lenders may view multiple credit line applications within a short time frame as an indicator of possible financial distress. A person with a perfect credit score may still be affected.
- To qualify for the best credit cards, a high score of 670 is typically required. If your credit score is lower than that, you should broaden your search to include cards that require lower scores.
- Lenders favor borrowers who can demonstrate a long track record of responsible debt repayment on loans and credit cards. Teenagers, newcomers, and people who have historically avoided credit may find this challenging. Lenders may be hesitant to provide financing to someone with a thin credit file.
- Inaccurate or negative information about your accounts can have a significant impact on your credit score. Your payment history is the single most important factor in determining your creditworthiness. Charge-offs, bankruptcies, and foreclosures are all examples of potentially damaging data.
- The more recent the late payment, the more damage it does to your credit score, even though it will remain on your credit report for seven years.
- Credit card companies must determine whether or not an applicant can afford to make their minimum monthly payments before issuing a card to them, per the Credit Card Act of 2009. You may not be approved for a credit card if your debt-to-income (DTI) ratio is too high or if your income is below the minimum required by the credit card issuer.
- To further restrict the availability of credit to the young adult demographic, the Credit Card Act mandates that applicants demonstrate that they are able to repay existing credit lines with their own income.