Have you submitted a credit card application form with high hopes? Were those hopes crushed upon receiving information that your application was declined?
With your current employment, you swear you can handle the responsibility of being a credit card owner. But, you were still rejected nonetheless.
You were informed that the reason behind the rejection is of a “young account age”. You are scratching your head as you try to determine the logic behind the rejection. For you, the reason isn’t sensible.
But, yes, a young account age is a valid reason for getting your credit card application rejected. With no valid credit history, many financial institutions are reluctant to grant you a card. Having no idea of your financial reputation, these financial institutions are unaware of your risk and money management style, pending debts, and more. In other words, granting you a credit card is deemed too risky for them.
Then again, an unseasoned account history is only one of the reasons why your credit card application could be turned down. Alongside, card application approval also depends on the rules and regulations of a particular financial institution.
Read on to explore other reasons for rejected card application.
Multiple Credit Card Application
If you already have multiple credit cards and you are applyin for more, there’s more than 50% chance of rejection. This is because multiple applications can affect your credit score. Every time you submit an application, your credit score suffers – in spite of 0 debts in all your cards.
While this effect is relatively low and can subside eventually, it is still a valid reason for a declined application. The trick is to lose the additional applications to different financial institutions. Focus on one financial institution that offers you the best credit card deal based on your current lifestyle. Make sure you fit all the requirements and you’re good to go!
Check out which credit card is the most suitable for your lifestyle here!
Low Credit Score
Having high (or at least enough) credit score is important. A low credit score suggests that you’re unreliable when it comes to using previous credit cards. It may mean that you submit payments late, you disregard due dates, and/or you repeatedly max out credit limits.
As Credit Bureau Singapore says, your credit score reveals your payment history. This means that your credit score contains the information that can help with the assessment of financial institutions on you.
Salary = Need High Numbers
A financial institution can give you a rejection letter if you fail to satisfy the minimum salary requirements. You have to submit proof (such as certificate of employment and monthly salary slip).
Many credit card companies in Singapore require SGD $30,000 of minimum annual income. If you make SGD $28,000, your application will be denied.
The issue of a low salary also goes hand in hand with other concerns about a person’s current employer or employment status. If you’re employed by an individual or a company that has a negative reputation, you’re more likely to be declined, too. Temporary, casual or part-time work may also be deemed as a risk factor and a reason for card rejection.
On the Verge of Bankruptcy
If you’re nearing bankruptcy or have unpaid debts on your credit report, financial institutions will only view you (particularly, your credit card application) as a problem. They will immediately see this as a threat to their stability and security; hence, your credit card application will definitley not be welcomed.
Put yourself in their shoes. If someone approaches you to borrow SGD $1,000 while you know he hasn’t paid off almost SGD $5,000 from ten other people, will you let him borrow money? Of course, you wouldn’t. By the looks of it, he’s already broke and doesn’t have the ability to re-pay you.
Final Thoughts: Turning Rejection into Approval
Upon a close look at the different possibilities why your application for a credit card got rejected, you can see that most (if not, all) rejections are only fair – both to you and to the financial institutions. Wanting a credit card doesn’t automatically mean that you are responsible enough to own one. You have to give the financial institution a reason (or plenty of reasons) to grant you one.
Just make sure you’re aware of the financial institution’s requirements and find out more about its preferred credit card holder and credit ratings too. Once you understand all these, working towards getting an application approved can be effortless.
If you’ve been rejected before, don’t be discouraged. At least, you can account it to experience, find out the reason for the rejection and work towards getting the problem fixed. After some time, you can re-apply.The next time around, you will be in a better positiong to get that approval.
What do you have to say? Have you ever been rejected when you applied for a credit card? Do you think the experience was fair? If you agree or disagree, kindly comment below.
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