Credit Card Application Rejection |
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If you have never had severe credit problems, such as charge-offs or collections, then you may expect to get approved anytime you complete a credit card application. However, the truth is that your credit card application can be rejected for many reasons, even some that seem trivial. Everything you do is under the microscope when you apply for credit, not just severe credit problems. Below are some of the most frequent credit card application rejections, that have nothing to do with bad credit.
Cannot Verify Home Phone Number If a lender cannot verify the home phone number that you list on your credit card application, it can be the one reason they need to hand you a denial. The reasons may be numerous, but the most popular belief is that this would make it harder for them to contact you due to a delinquent payment or because it may be someone else trying to fill out a credit card application in your name. To remedy this, it is best to take a look at all of your credit reports and make sure that your current home phone number is listed on each. Balances too High If the balances on your current credit cards are too high, it can be a good reason for a lender to deny your credit card application. This is because, although you may have good credit, the more debt you have, the more likely it will be that you will eventually become delinquent in your payments. Furthermore, if you have high balances, it is a sign that you have not paid much on your current cards. In a lender's eyes, that is a clear warning sign that you may be using your credit more than you should. Pyramiding Debt Pyramiding debt is a tricky term and can mean different things for different lenders. For most, pyramiding debt can mean one of two things: having too much available credit already or accumulating too many new credit cards. Essentially these can mean the same thing, since getting a lot of new credit cards can give you too much available credit. But, you might be denied for pyramiding debt even if you have not put in a credit card application for several months, but you still have a lot of credit available to you -- especially if it is equal to or greater than your current income. Since many people apply for a lot of cards in order to keep their individual balances low, this is a way for lenders to weed these people out. To the average consumer, these reasons seem frivolous but, to a lender, they can be the first sign that they are reviewing the credit card application of someone who will eventually default or who will be hard to track down if they do become delinquent. Even if these reasons do not get you completely denied, because you have a very high credit score that gives the lender confidence in you, they can still cause you to get a much lower credit limit than you would have received otherwise. The best strategy is to make sure each of these factors are in check (as much as possible anyway), before you fill out any credit card applications. |
