Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
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    Check Reasons for Credit Card Rejection

    As plastic money becomes more prevalent, applications for credit cards have also been steadily rising. Higher disposable incomes and changing economic trends have also been contributors to the rise in the use of credit cards. There are credit cards to suit every need, business cards to cash back ones, shopping to entertainment. And while banks might be lining up to offer customers credit cards, there could be times when your application for a new credit card might not be approved.

    A Few Common Reason Why A Credit Card Application Could Be Rejected Are Listed Below:

    Low Income:

    A bank or financial institution is usually more than happy to extend lines of credit to customers since this means they have another source of income courtesy the many charges associated with a credit card. Banks also earn through interest charges if the cardholder fails to pay off the whole amount due at the end of each billing cycle. In spite of this, most banks will exercise some caution before issuing a card to an applicant with a low income and a poor employment record as the bank cannot guarantee the cardholder will be able to pay off the debt accrued on the card.

    To avoid this being a reason behind the bank’s rejection of a credit card application, it is advisable to check if you as an applicant meet the eligibility criteria set for a particular card. This is especially true since banks usually require the applicant to submit supporting documents such as salary slips, Form 16 as well as tax returns.

    Bad Credit Score:

    Having a poor credit score is the more common reason a credit card application is rejected. A credit score determines your creditworthiness to lenders, and also measures your ability and history of repayments. Having a poor or low credit score effectively indicates that you as an applicant are unable or inefficient at managing your money and assets. This in turn makes lenders wary of issuing credit to you, as there is a possibility of defaulting on the amount.

    Credit scores are determined by credit bureaus such as Experian and CIBIL. Having a low CIBIL score would directly affect your chances of getting a credit card application approved.

    Some of the main reasons a credit score could be low are mentioned below:

    • Taking out loans with multiple lenders.
    • Not paying EMI’s on time.
    • Defaulting on loan payments.
    • Applying for a credit card with multiple lenders.

    Not having a loan history or a credit history also negatively affects your chances of getting your application approved, as the bank has no previous history on which to measure your creditworthiness.

    Errors in the Application Form:

    While this might seem very trivial, making a mistake in the credit card application form could result in the rejection of the application. AN incorrectly filled in application form or multiple errors in the form has resulted in applicants losing out on acquiring a credit card. Failure to mention certain details (omission of facts) are also grounds for rejection, as banks have access to your credit history as well as your previous financial records. To avoid your application being rejected due to such a reason, it is advisable to apply online and review all information as presented on the screen. In this way you will avoid forgetting to enter some information.

    Owning Multiple Cards:

    Applicants who already have multiple credit cards issued in their name could find it more difficult to get approval for a fresh credit card. This is because all lenders verify an applicant’s reliability by looking at the debt-to-income ratio. This ratio measures the outflow of income to card repayments made. If the outflow is very high, the lender could choose to deny the application since the applicant is already spending a large portion of his/her income on repaying existing credit card. This would in turn make it difficult for the applicant to pay off another credit card, inviting the possibility of a future payment default.

    Choosing to transfer a credit balance from one card to another to avoid hefty interest fees also shows the applicant in poor light as it indicates poor judgement and an inability to maintain credit and payments.


    The applicant’s occupation is another factor that could impact his/her credit application. Work history as well as choice of profession play a role in determining whether an application will be cleared or rejected. Having a job that does not have a steady source of income would work against the applicant. The place of work and organisation are also taken into account as the applicant’s repayment history is evaluated based on this. Working in reputed companies and showing a steady work history would significantly help ensure a credit card application is not rejected due to occupation.

    Address Verification:

    Address verification is a compulsory part of the check a bank is obliged to do before issuing a credit card to an applicant. The address provided in the application form is verified routinely, and in case of multiple addresses being submitted, each of these addresses are verified. It is essential that the applicant provide accurate addresses and information on their place of work and residence to ensure the approval of an application. A discrepancy in the address details is grounds for automatic rejection of an application, and thus applicants should ensure their address and the proof submitted are adequate and accurate.

    How To Ensure Credit Card Application Approval

    Applicants seeking to avoid having their credit card application declined can refer to the below points:

    • Ensure all outstanding amounts such as bills and loan payments are paid off in full and on time.
    • Avoid spending too much on a card, especially a new card since it shows a desperation for credit.
    • Always provide accurate documentation when it comes to identity or address proof. Talk to the bank if there is a problem with the same so they are aware of a possible discrepancy and the reason for it.

    By keeping the above points in mind, applicants can avoid the pitfall of having their application rejected.

    Poor credit history:

    If the applicant has not been paying their loan repayment instalments or their other credit card bills on time, the bank becomes reluctant in approving their application for a new credit card. Hence, it is advised to keep one’s credit score healthy by making payments on time and by being a defaulter, to make credit card application approval more likely.

    Too much outstanding:

    If the applicant owns other credit cards and have not made regular payments towards them, the bank is more likely to not approve their credit card application. Banks want to see that the applicant uses only a small portion of their credit limit that is available to them. In case they are using too much of their credit limit, the bank will deny them a new credit card.

    Insufficient income

    : Apart from the credit history of the applicant, their annual income also plays a significant role in procuring a credit card. While each credit card has an income eligibility criteria, it is important to meet the same in order to get your credit card application approved by the bank.

    Long-pending charge off:

    If the applicant has an outstanding that is more than six months’ old, banks are more likely to reject their application. A long-pending outstanding also weakens the applicant's credit history which has adverse effects on every kind of loan application.

    Age of the applicant:

    A major share of the banks in India pay attention to the age of the applicant. If the age of the applicant is less than 18 years, banks do not prefer to approve their credit card application. At the most, the banks will offer them a supplementary credit card to help them take care of their credit-related needs.   

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