Why your credit card application was declined, and how to fix it
Your credit score is too low, you don't earn enough, you spend too much — these are all reasons your credit card application might be declined.
Key takeaways
- 9% of Australians have had a credit card application declined, according to Finder research.
- Most of the time a credit card application gets declined because you didn't meet a minimum income requirement, your credit score is too low or you spend too much.
- It's wise to avoid applying for a new credit card right after an application is declined. Wait until you are in a better position to get approved.
8 reasons why your credit card application may be declined
- You have irregular income. Full-time, or stable part-time employment will increase your chances of getting a card application across the line.
- Your income is too low. Some credit cards list a specific minimum income requirement that you must meet. And even if this isn't listed, card providers are obliged to lend responsibly. This means they can't give you a card if you can't afford repay it.
- Your spending is too high. Even if you do meet the minimum income criteria, you'll get knocked back if you spend too much of your income each month.
- Your credit score is too low. Most Australian credit cards need you to have a credit score that is Good or Excellent. Check your credit score for free and see if you have any late or missed payments on debts and bills to sort out.
- You put incorrect information in your application. Credit card issuers need to verify all of your details before they move forward with the application. Something as simple as a misspelt address or wrong digit in your licence could cause a problem.
- You're under 18. You have to be 18 or older to get a credit card in Australia.
- Your circumstances have changed recently. If you have recently moved or changed jobs and haven't updated this information across all your networks, it could be hard for the issuer to verify your identity or access your credit report.
- You don't meet the citizenship or residency requirements. While there are some credit cards available for temporary residents who hold a specific visa, other cards are only available for permanent residents and citizens of Australia.
How to improve your chances of credit card approval next time
If your credit card application has been declined, don't rush out and apply for another one right away. Look at the list above and try to figure out what went wrong.
Applying for several credit cards in a short period of time leads to multiple enquiries on your credit report and can be a red flag.
- Get a copy of your credit report. This allows you to make sure all the details listed are accurate. It can also give you a better understanding of how you can improve your finances. For example, if you have multiple late payments listed, paying your bills on time could improve your credit score.
- Choose a card that suits your circumstances. If you have a low income, you probably won't qualify for a credit card with a high annual fee that lets you earn stacks of frequent flyer points. Look for a low rate, low fee card.
- Update your details before you apply. When you check your credit history, make sure that your personal details (including residential address, phone number, email address and employment) are up to date before you apply.
- Reduce your spending. Before applying for another card, try to cut back on how much you spend for a month or two. This will increase your chances of success.
- Apply jointly. If you have a partner, making a joint application can boost your chance of success, especially if you both work. This probably won't work if one (or both) of you has a low credit score though.
- Have your supporting documentation ready. Credit card issuers require a range of documents before they can process your application. This includes copies of your passport or driver's licence, pay slips and bank statements. This will help the bank verify your information and may speed up the approval process.
Our expert says: The fear of rejection is real
"19% of Australians say fear of rejection has stopped them from applying for a financial product — including 8% who avoided applying for a credit card and 5% who avoided applying for a personal loan. I went through a similar experience when I got rejected for a credit card. Frustratingly, credit card providers rarely tell you exactly why you got declined. But they do suggest waiting a month or two before applying again. Most of the time the reason you got rejected will be fairly obvious: spending too much, not earning enough, applying for an unsuitable card, or your credit score is too low. "
Frequently asked questions
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Is there a way to ascertain the reasons behind rejection? Regular churner, 3 – 4 cards a year, high income, low debt, excellent credit score, always wait for full closure of previous card before next application.
Got a rejection from a bank, and they refuse to provide a reason other than doesnt meet criteria. Realistic view of my credit servicing capability makes it highly unlikely it is due to credit worthiness.
Not wanting to apply for another card until I understand the reasoning, but cannot get a view.
Hi Ark, We’ve seen banks start to introducing policies to counteract “churning” – things like staggering bonus points so you get some initially and some after 12 months (or even 15 months), and making customers wait at least 12-24 months before they can reapply for a card and be eligible for the bonus offer. They are aware of churn risk and may take steps to mitigate it. While it’s impossible to say with certainty why your application was rejected, if you are applying for 3-4 cards per year and you’re closing multiple accounts per year, your credit file will reflect that activity and that might not meet that bank’s criteria. Keep in mind every bank has different policies and criteria, so a rejection one one doesn’t mean you’ll get rejected by all. Hope this helps!
In the “Dos and don’ts for credit card applications” you list to not apply for several credit cards within a short period of time. What is considered a “short period of time”? Weeks, months etc… please elaborate on the time frame.
Hi Sim,
Thanks for your comment.
Short period of time for numerous credit card applications may be in a weekly or monthly manner. These days most providers offer an outcome in minutes when you apply online. No matter how long the wait, it is important to hold off applying for other products until you have an outcome. Therefore, you should submit one application at a time.
Regards,
Jhezelyn
Hi,
I am interested in applying for a credit card with a very small limit, just to build up my credit history and establish a good reputation.
However, absolutely NOBODY will approve me, even for the lowest limit.
I earn approx. $35,000 pa.
So my question is, how can I build up my history when nobody will allow me the opportunity to?
Hi Dylan,
Thanks for reaching out. I’m sorry to hear about the problem you’re having.
I highly recommend that you check our guide on how to improve your credit score. The tips mentioned there don’t need you to open a credit. So, please do check that one out.
You may also seek the advice of a Credit Specialist for a more personalised help.
I hope this helps.
Cheers,
Danielle
Hi,
I have recently applied for a credit card but later on realised that other credit provider offers a better deal. The credit card that I have already applied for has not been approved yet (I kept missing their call for the ID verification). Would it be not wise to call them up and withdraw my application then apply for one that offers better deal as there would be a recent enquiry recorded on my credit file?
Hi Co,
Thank you for your question.
Please note that all credit applications you make are recorded in your credit file whether they are approved or not. Generally, too many applications within a short period may have a negative impact your file.
So if you will apply for the other card with the better deal, most likely, the issuer will make an enquiry on your file and will find that you have just made a recent application from a different bank. So yes, it may not be a good idea to apply for that card (with the better deal) this very soon.
Cheers,
May
Hi May,
Thank you for your reply. So how long should I wait to apply for the other one? I know this can be very different cases by cases, but how about in general.
Thanks
Hi Co,
Thanks for getting back.
Generally, to ensure that your rating will not be affected, you may have to wait for a few months (or up to 6 months) before you start applying again.
Cheers,
May
If my card application was declined by an online 60 second response will it be recorded on my credit file?
Hi Dawn,
Thank you for your question.
Most likely, yes. Usually, when you apply for any form of credit, for instance, a credit card, the bank will surely check your credit file to examine your ‘creditworthiness’ and by doing so, that will leave an “enquiry” on your file.
Cheers,
May
Yes but this is a 60 second response….how can they do a credit check in that amount of time?
Hi Dawn,
Thank you for getting back.
Unfortunately, all applications are recorded in the file and the “speed of response” is not a factor at all. So, in future, in order to avoid any possible enquiry on your credit file, you may have to contact the lender or the credit card company first and discuss your chances of approval with them before submitting an application.
Regards,
May