Denied for Credit Card with a High Credit
There are people who were rejected for credit cards or another type of loan, despite having a good credit score. The people who are most upset is the ones who have a friend else who was approved for the same credit card, but with an less scores on credit. Why is that? What is the reason why the credit card company refuse to approve a person who has better credit, and then approve one with less credit?Denied for Credit Card
There are three possibilities (or at the very least, three we think are as the best):
1. Too Much Debt
It is entirely possible to earn an impressive credit score even while taking on debt. If you make your payments on time but spend more than what you repay then you’ll be slipping deeper and deeper into debt, while gaining many goodwill rewards due to timely payments. Since credit history is the number one factor that determines your credit score. So when you only make the minimum payments, your credit score could still improve as time passes.
However, if your debt is at an amount that is beyond your reach and you want to apply for another credit line, the credit card issuer might examine your credit and tell you “No way.” Sure your credit score is great but to the credit card company, the credit score makes you appear like a bomb that’s about to explode. They’d prefer not to be the ones to suffer when your financial situation collapses.
2. Too Much Credit or Too Much Recent Credit
There is a way to accumulate massive amounts of credit over the course of time, get a good credit scores, and still be approved for credit. However, sometimes the sheer amount of credit can cause you to appear risky. The red flags are usually up to credit card companies when one of the following applies:
- You’ve had a track record of opening a new credit card only to get signup bonuses, and then not using the credit card ever again.
- You can accumulate lots of credit all at the same time.
In the first scenario your past previous history of “churning” through credit cards could come back to bite you. Companies that issue credit cards are searching for loyal customers, not those who are able to enjoy benefits and then leave. If you’re likely to be a non-profitable customer who leaves whenever you can do not be surprised if you and your impressive credit score is denied.
In the second instance the accumulation of credit at one time can make it appear that you’re either suffering from a severe financial issue and require credit to draw on or that you’re an escaped criminal about to rack up the credit cards and then disappear and never be ever seen again. In either scenario the credit card company considers you to be someone who might be a risk to them even if your credit score is not in the right direction.
3. Not Enough Income
Even even if your credit score is high, you might not earn enough to qualify for credit cards. Nothing is “wrong” with you or your credit score, however certain issuers might be looking for a particular kind of client, particularly for credit cards that are high-end and offer numerous advantages. If your earnings do not match the amount they are looking for — or when you have a track record of low-volume card transactions You could be denied. Credit card companies earn money not just through interest charges to their customers, but also from the fees they charge merchants each time a card is utilized. If you’re earning a small amount and/or a lack of usage they may see you as unattractive even with a good credit score.
Things Can Change
What the company that issues credit cards wants from its customers can be different from one duration to another. If the general economy is positive and the issuer is performing well and has a large number of customers, they will be accepted. If the economy isn’t as strong and/or the issuer’s profits aren’t as good the issuer could lower their standards and not approve more customers. There is no way to influence this.
Credit Card Companies Want Money
In the end, credit card issuers are looking to make money. If your track record suggests that you’re not able to earn that income due to too much debt, several cards, or small a income, they may and will refuse your application, no matter how high your credit score is.
Credit Scores Are Still Important
This article does not change the fact that maintaining the credit rating at an acceptable standard should be your objective. This is just to point out that having a good credit score does not constitute an absolute promise of any kind of thing. Everything else being equal having a better score is always more beneficial than having lower scores.