Now, the world doesn’t revolve around paper money. A financial revolution is taking place all around the world, where plastic money is taking the position of paper money. Credit cards have become extremely popular, and every individual aspires to get hold of a credit card. It might be an exciting task to choose credit cards from a variety of options. But credit card rejection might spoil all the excitement. If an individual ever faces credit card rejection, then he/she should not be disappointed and follow three basic steps to turn the rejection into the approval.
The steps are:
Step 1: Find the cause of rejection
There is a reason why the bank has rejected the credit card application. Therefore, it becomes important for the person to find the reason for this rejection. The credit card application can get rejected because of the following reasons:
- Bad credit score – Before the bank approves the credit card application, the bank checks the individual’s credit score as well as a credit report. If, because of the delays in the payment of bills or debt, the credit score has been badly hit, then it is very likely that the bank is going to reject the application.
- Low income – If the individual’s job profile is not stable or his/her income is low, then the bank can find this as a problem to sanction the credit cards because they doubt the ability of the individual to pay the credit card bill in the future.
- Incorrect information – Credit card rejection can also take place due to minor spelling mistakes or any incorrect information. Therefore, the individual needs to recheck the application multiple times.
- Financial Problems – If an individual is going through financial problems or he/she already has their hands full because of the existing debts, then this can lead to a rejection of credit card application by banks based on uncertainty in paying bills.
Step 2: Build the Credit Score
The individual needs to keep his/her credit score healthy so that they can apply for a loan in the future. Even if the individual has a good credit score, he/she needs to maintain it because it won’t last long.
Following are some of the things that the individual needs to do to improve his/her credit score:
- Pay bills on time – Internet bills, mobile bills, telephone bills, gas bills, electricity bills, or any other utility bills should be paid on time. If bills are paid before the last date, then it is much better. This is going to have a positive impact on the individual’s credit score.
- Pay EMIs of existing debts regularly – If an individual has debt or loan on his/her head, then the individual needs to make sure to clear the debt by paying EMIs regularly on time. If the individual doesn’t default on EMIs, then the credit score is going to improve with every passing month.
- Build credit score using a secured card – For building a credit score, the individual should opt for the cards that are issued by the banks against property or fixed deposits. Irrespective of having a bad credit score, the individual can get approval for a secured card. The individual can make use of the secured card to pay the credit card bills on time and to shop. This will eventually lead to a better credit score.
Step 3: Choose. Inquire. Apply
Once there has been some improvement in the credit score of the individual, the individual should choose the credit score that is based on their needs. Before the individual applies for the card, the individual needs to check the website of the credit card provider and inquire about the prerequisites for the approval of the card. The individual needs to take care that the credit card application is not being rejected because of the individual’s credit score, job profile, or income.