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Reasons Why Your Credit Card Application Can Be Rejected

In the ever progressing global financial market, there are multiple options available when you’re looking to get a credit card. Applying for a card has never been easier now that you can even apply for a credit card online in a matter of a few minutes. Once your credit card application is approved, the banks more or less inform you right away. However, if your credit card application is rejected, you get a letter informing you of the same within 7-10 business days. Banks may or may not provide a reason as to why you were rejected.

A credit card rejection can reflect negatively on your credit history, and it is advisable to understand the reason why you were rejected before you apply for another one. Here, we’ve put together some of the reasons why your credit card applications can get rejected.

Incorrect Completion of Form and Lack of Documents

At first glance, this might seem inconsequential to most people. But, you chance the risk of being rejected if your application is missing crucial information. One of the ways that you can avoid this mistake is to fill the application form online. In online applications, you are not allowed to proceed or submit the form if you have forgotten to fill any of the required fields or don’t have the information required for them. Thus, you will not run the risk of submitting an improperly filled application. Further, the lack of proper documents along with the application form might be another reason that banks may choose to reject an application. Here are some of the documents that you may need to attach along with your application form.

  • If you are a Citizen or PR, your NRIC or valid passport
  • Your employment pass, if you are a foreigner
  • Latest Income Tax Notice of Assessment
  • Front and Back copy of NRIC
  • Latest Payslips
  • History statement of your CPF payments.

Your Debt Balance is Too High

Having too much debt or unpaid loan balances might be one of the reasons that banks reject your credit card application.  Generally, if credit card companies notice a pattern of delay in making your loan payments, they might consider not granting you a line of credit. After all, why would they want to risk giving you credit when they see that you’re unable to pay off your existing debts? One thing that you should consider doing in such situations is to take positive steps to pay off or reduce already existing debts. This might improve your chances of getting approved for a credit card.

You Do Not Meet the Income Criteria

Different credit card companies have different levels of annual income needed to be eligible for their cards. Some providers even request for the copies of your latest income statements and employment proof to determine if you qualify. It is advisable to go through the eligibility criteria for each card on their websites and see if they fit your income level. Choosing a card based on how much you earn might help you avoid getting rejected

You Have Too Many Credit Cards

Even though having multiple credit cards has its advantages, there are some associated downsides as well. Credit card companies get suspicious when you apply for credit when you already have many others at your disposal. Having too many cards can increase the chances of missed payments, something card companies will want to avoid. Cutting down on the number of active cards you have would be a wise choice to make in this regard. You can consider going for a balance transfer program, this way you can consolidate your debt and reduce the number of cards in use.

Too Many Inquiries on Your Credit Report

An inquiry on your credit report is made each time you apply for any form of credit. This is done because banks usually ask for a copy of your credit report each time. Banks may view this as a sign that you may be taking more credit than required. Too many credit inquiries within a short period of time may not be viewed kindly by credit card providers, as they may start to think of you as a potential defaulter. The best way to approach this problem is, if you’ve applied for any kind of credit recently, wait for a few months before applying for credit cards again.

Insufficient Credit History

Having no line of credit or a lack of credit reports might also be seen as a red flag. Ideally, your credit report should reflect that you have been active for the past 6 months. Banks and card providers can reject applications without enough credit information, as they cannot decipher your ability to pay back the money. So, if you are applying for a credit card for the first time, you might want to consider going for a secured credit card. A secured card may be easier to get because the banks are providing you with a line of credit against some kind of a collateral. This, in their eyes, is a much safer bet. That being said, there are other cards in Singapore that you can apply for if you’ve just started your first job or are applying for your first credit card. Check out the various credit card options available in Singapore here.

Your Employment Isn’t Stable Enough

Credit card providers generally look for people who have a stable employment history, as this means they most likely have the means to pay back the money. One of the reasons why you might get rejected is if you have a temporary job, a part-time job, or if you are new to your job. Further, if you have been switching jobs frequently or have spent a considerable amount of time unemployed, you might find it hard to get the approval for your card. So before you apply for your credit card, it is advisable to get a look at your credit report. Displaying a good savings history and repaying your loans on time might help your cause. Go through the bank’s website thoroughly to make sure that you fulfil all the necessary criteria. Once you fully understand these, getting your application approved might not be as difficult.

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