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You probably get tons of solicitations to apply for new credit cards. You are told that your were pre-selected (or some variation of that phrase). Sadly, applicants filling out these solicitations are often denied the new card – leaving them wondering why.
Although every situation is unique, there are a few main factors that every credit card application is based upon.
Common Reasons Your Application Was Denied
Do you have a history of late or missed payments? Did you know that this can affect your credit rating, lowering it?
Missed payments affect your credit rating, even if they are only days late. For this reason, it is essential that we pay attention to the due date on payments.
To organize payments, keep all bills to be paid in one place, or pay them as they arrive in your mailbox.
In the past, if you have defaulted on payments than this can affect your credit rating greatly. In the case that you have defaulted on a payment and the payment has been written off, your credit rating will indeed take a hit.
Do you have a job?
Since the credit crunch of late, many credit card companies are no longer issuing offers to those with an income of under $50,000. This income must be verifiable with a W9 or verification from the employer or tax stubs.
This information and more is necessary for those claiming to be self employed.
At any time, the credit card company can request the information from the consumer or from the employer. This proof of income is sometimes necessary to obtain a credit card. If it is missing, or unverifiable – you may have been denied!
How is your employment history and your ability to maintain regular employment?
Credit card companies look to this information to determine the chances of the income continuing into the future. If you have had sporadic employment in the past and have been unable to complete a job, than it may be time to consider a career change. Secure employment can add valuable merit to obtaining credit.
Income comes with a job.
If you are not able to create an income that will fund your current living expenses, the credit payments requested and current liabilities than you may have been rejected.
How can you fix this? Consider asking a friend or relative who does meet the requirements to co-sign the account. Keep in mind, that they have a great responsibility of maintaining payments should the payments be missed.
Some debt requires collateral be used as a method of security – just in case the owner of the debt is unable to make payments. You may have been rejected because of a lack of collateral. This most often includes vehicles, properties, investments or savings.
One of the largest reasons that people are not approved for credit cards is the fact that they have a high debt to income ratio already, if this is the reason, consider methods to pay down and manage the debt before applying for more credit.