You're not right for us - why credit card companies turn you down
Everyone feels slighted if their application for a credit card is denied, especially as so many cards seem to offer almost guaranteed approval. There are a plethora of possible reasons for rejection, so the first thing to do is not to panic. A credit card rejection does not necessarily mean that you have a poor credit rating. It could be just a simple mistake, a problem with your address or a clerical error. Even the slightest thing can tarnish an otherwise impeccable record. But there are things you can do to polish up your credit rating and get your finances moving again.
Lenders are required by law to send you a letter telling you exactly why your application for credit has been denied, but sometimes these letters can be a little vague. So the first thing to do is make sure that the credit card company denied your application for a legitimate reason. Although mistakes are uncommon, they can and do happen. If you feel that the reason given is not legitimate grounds for denial, you can take action. The lender is also required to send you a document giving you the name of the credit agency that provided your credit details to the lender. If, when you check these details you come across inaccuracies, then it is essential that you contact the credit agency direct to inform them of the error. A simple mistake could be impacting on your finances much more than you are aware. It could be this small mistake that the lender sees as legitimate reason for refusal, and that's a situation that is easily rectified.
A credit report request incurs a small charge, but it gives you that all-powerful weapon - information. The credit agency will give you all the details they hold on you and are perfectly willing to made amendments if you come across an inaccuracy. Contrary to popular belief, there is no 'black list': credit agencies do their very best to make sure that information held is accurate and relevant, but no system is perfect. Once you have got the agency to correct your details, you could then appeal against the initial rejection by the credit card company; however, these cases rarely succeed. A better plan may be to wait a short while for the information to filter down, and then reapply.
Credit histories are believed to be the preserve of the banks and agencies, with many people unaware that they have every right to access the information held on them. Your credit 'score' is calculated by your past financial history, detailing loans, repayments, bank history and how you have run your financial affairs. So-called 'Black data' (including details on late payments, defaults or other problems you may have had over the past six years) is included on these records, but 'White data' is also shared between financial organisations and credit lenders. White data tells lenders about the less troublesome aspects of your financial management, such as customers who invariably pay their credit card repayments in full every month and are adept at taking advantage of 'card jumping' to benefit from 0% interest offers. Surprisingly, white data such as this can actually count against you. Lenders make their money in interest charges, so a customer who is astute enough to avoid these charges is not a profitable option. However, the other white data can count in your favour, and it's this that you need to focus on.
Credit card application denial can be the result of a range of issues, from the simple to the complex. Something as basic as forgetting to send off your electoral registration can mean that your credit rating drops - the credit card company simply doesn't have any proof of your address. Mistakes like this can be rectified easily, improving your chances of being accepted next time you apply for a credit card. If you are turned down repeatedly by several companies it may indicate a bigger problem with your credit history. This isn't the time to bury your head in the sand and hope it'll get better on its own. You can take positive steps to rectify the situation. By making sure you pay your bills on time, pay off debt rather than shifting it around and managing your score, you can stay in charge of your credit rating.
If you have been rejected for a credit card application, it is wise to wait a little while before reapplying. Giving yourself a waiting period of 90 days will also provide you with the opportunity to rectify any problems that may have led to the rejection in the first place. A scattergun approach to applications (applying to multiple credit card companies in the hope that one says yes) is a pointless exercise. All this will do is decrease your chances of being accepted by any of the companies and do more damage to your credit rating. A systematic approach and a positive attitude to financial management are the best ways to ensure that your next application is accepted.
Lenders are required by law to send you a letter telling you exactly why your application for credit has been denied, but sometimes these letters can be a little vague. So the first thing to do is make sure that the credit card company denied your application for a legitimate reason. Although mistakes are uncommon, they can and do happen. If you feel that the reason given is not legitimate grounds for denial, you can take action. The lender is also required to send you a document giving you the name of the credit agency that provided your credit details to the lender. If, when you check these details you come across inaccuracies, then it is essential that you contact the credit agency direct to inform them of the error. A simple mistake could be impacting on your finances much more than you are aware. It could be this small mistake that the lender sees as legitimate reason for refusal, and that's a situation that is easily rectified.
A credit report request incurs a small charge, but it gives you that all-powerful weapon - information. The credit agency will give you all the details they hold on you and are perfectly willing to made amendments if you come across an inaccuracy. Contrary to popular belief, there is no 'black list': credit agencies do their very best to make sure that information held is accurate and relevant, but no system is perfect. Once you have got the agency to correct your details, you could then appeal against the initial rejection by the credit card company; however, these cases rarely succeed. A better plan may be to wait a short while for the information to filter down, and then reapply.
Credit histories are believed to be the preserve of the banks and agencies, with many people unaware that they have every right to access the information held on them. Your credit 'score' is calculated by your past financial history, detailing loans, repayments, bank history and how you have run your financial affairs. So-called 'Black data' (including details on late payments, defaults or other problems you may have had over the past six years) is included on these records, but 'White data' is also shared between financial organisations and credit lenders. White data tells lenders about the less troublesome aspects of your financial management, such as customers who invariably pay their credit card repayments in full every month and are adept at taking advantage of 'card jumping' to benefit from 0% interest offers. Surprisingly, white data such as this can actually count against you. Lenders make their money in interest charges, so a customer who is astute enough to avoid these charges is not a profitable option. However, the other white data can count in your favour, and it's this that you need to focus on.
Credit card application denial can be the result of a range of issues, from the simple to the complex. Something as basic as forgetting to send off your electoral registration can mean that your credit rating drops - the credit card company simply doesn't have any proof of your address. Mistakes like this can be rectified easily, improving your chances of being accepted next time you apply for a credit card. If you are turned down repeatedly by several companies it may indicate a bigger problem with your credit history. This isn't the time to bury your head in the sand and hope it'll get better on its own. You can take positive steps to rectify the situation. By making sure you pay your bills on time, pay off debt rather than shifting it around and managing your score, you can stay in charge of your credit rating.
If you have been rejected for a credit card application, it is wise to wait a little while before reapplying. Giving yourself a waiting period of 90 days will also provide you with the opportunity to rectify any problems that may have led to the rejection in the first place. A scattergun approach to applications (applying to multiple credit card companies in the hope that one says yes) is a pointless exercise. All this will do is decrease your chances of being accepted by any of the companies and do more damage to your credit rating. A systematic approach and a positive attitude to financial management are the best ways to ensure that your next application is accepted.
About the Author:
James Baker is an experienced financial writer that likes to simplify the financial jargon for the public. Find out more information on the credit card application here.
posted by Debt Consolidation Loan at
7:04 AM
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