Why was I turned down for a credit card?
When you apply for a credit card and are then turned down, it can be incredibly frustrating – particularly if you’re not told why.
Often, the lender you applied to will simply say you have been unsuccessful, but provide no further clues into the reason why this was the case. However, it’s likely that you missed out for one of two reasons: you didn’t meet the criteria your lender was looking for or your credit history let you down.
The trouble is, as we mentioned earlier, every lender is looking for something different. It may simply be that, right now, you do not fit into the category of customer they are after. For example, the card you applied for may have been designed for a homeowner with earnings of more than £40,000 a year. If this isn’t you, you won’t be accepted.
To avoid this happening again, it’s worth taking a look at the different credit cards on the market and seeing if you can work out the type of customer they’re aimed at. Chances are, the people the cards are designed for are probably the ones who are most likely to be accepted. For example, if a credit card comes with a low interest rate and lots of rewards, the lender is likely to be looking for a customer with a long history of responsible borrowing so they have a greater assurance that the money they lend will be repaid.
If you find a card that appears to be aimed at someone just like you and with your needs, you may be more confident of being accepted. There are tools, like one offered by confused.com, which allow you to work out what credit cards you’re most likely to be accepted for.
Applying for the wrong credit card is not the only reason you may have been turned down; your credit rating may have acted against you. This is a record of your borrowing for the last six years and lists all the lines of credit you have available to you and how you’ve been using them.
If your credit report shows a history of responsible borrowing – meaning you have paid your balance in full or close to that every month and have never missed a repayment – you probably don’t have to worry about it standing against you. However, if your credit report shows a difficult history of borrowing – perhaps you have defaulted on repayments in the past, made multiple applications for credit within a short space of time, taken on a debt solution like a debt management plan, been declared insolvent, or even been the subject of legal action by your lenders – the lender you apply to is likely to be extra cautious about you borrowing from them.
On the other hand, if you have no credit history to speak of because until now you’ve avoided borrowing, this may also stand against you. It’s important to many lenders that they can see evidence that you’re able to borrow money and pay it back again on time and if you’ve never done this it makes it harder to prove you can be responsible – regardless of whether or not you will be.
It’s not all doom and gloom though, and there are ways to give yourself the best chance possible of being accepted.