Avoid ending up on the credit card reject pile with these tips.
Have you ever been rejected when trying to apply for a credit card, but couldn’t work out what went wrong? If so you make up part of the two in five credit card applicants who are unsuccessful in credit card applications and don’t know why.
If you’ve ever tried to find out why you were rejected for a card, you’ll know credit card providers are tight-lipped when it comes to providing reasons for failed applications, leaving many Australians frustrated and lost when starting new applications.
Insights to applications aren't a surprise to the team here at creditcardfinder.com.au. We receive the largest volume of credit card applications than any other comparison website in Australia. In fact, 10 percent of all successful credit card applications are initiated through our site. We hear from several unsuccessful credit card applicants because many providers won’t explain why they were rejected. This can be frustrating because every rejected credit card application appears on your credit file and can make you look less appealing for future applications made in near future.
While we can’t change the fact that providers won’t reveal details about their lending criteria, we can reveal the main reasons why applicants get rejected and ways to increase your chances of success.
Here are some important reasons why credit card applications are rejected by providers:
- Issues with your credit file. Your credit file contains your personal and financial history and is often the main thing used to determine whether your application is successful or not. Issues with your credit file may include having too many applications at the same time, too many missed payments on bills or loans and other similar factors which present a red flag to credit providers. Check your credit file and see if there are any obvious problems with it. You can get a copy of your credit file for free through services such as My Credit File.
- Providing false information. In the information age we live in it’s naive to think you can fool credit card providers. Out of all organisations who need to ensure they have accurate information, they stand to lose the most if their information is incorrect. Even if you do not intentionally provide false information, you may prove yourself untrustworthy to the banks. Providers check your financial history through credit file bureaus like Equifax or Dun and Bradstreet.
- Your income isn’t sufficient. Most cards have a minimum income amount to qualify for the credit card, and if you do not meet this requirement you will not be approved. The income minimum may be different for citizens/permanent residents and temporary residents.
See also: Low income credit cards
- You’re self employed or unemployed. Applicants generally need to show at least two months of income to prove they can meet repayments.
- Non-resident. Some providers don't accept credit card applications if you are not an Australian resident. However, there are lenders that do allow credit card applications to temporary residents.
What can you do to improve your chances of being approved?
Australians can improve their chances of being approved if they get their finances in order before applying for a new credit card.
- Have your paperwork ready. After you’ve compared credit cards online, make sure you have all the information you need before applying. Sometimes applicants are rejected because they take too long to get back to the provider with all of their details. Check on the provider’s website to see what they require and have all your paperwork ready.
- Read the fine print. It’s also important to read the fine print to know if the card is suitable for you. For instance, the provider should disclose the minimum income needed so if you don’t earn enough there’s no point applying for the card.
- Manage your credit file. Your credit file is important when it comes to applying for any credit or loan because the provider checks your records to determine if you’re a risky investment. Every repayment on your loans and bills can make a big difference so make sure you keep on track, pay your bills on time and check your credit file.