Was your credit card application denied? It can be frustrating, and could also be a sign of some issues with your finances. If you understand some of the key factors that are considered in the credit card application process, you can work to improve your financial situation so you can reapply in the future. Here is an overview of some of the criteria creditors review when considering applications.

What Creditors Look For in an Application

Credit card companies look at a number of things when considering your application:

  • Credit Score:If your credit score is low, start by checking your credit report for errors that might be affecting your score which you might be able to obtain for free through some banks and lenders. If you see no errors on your credit report but your score is still low, you may be able to increase it over time by paying your bills on time and in full, and paying down any debts on a regular basis.
  • Credit Card Utilization:Your credit utilization ratio compares the amount of credit you use to the amount of credit you have. Using too much of your available credit can negatively affect your credit score.
  • Credit History:A long credit history, especially one that shows you’ve paid your bills on time, will make you a stronger candidate for a new credit card. Having no credit history at all means that creditors won’t see a trend of responsible credit usage. In your case, a secured credit card might be your best bet. After you are approved, you put down a deposit that will equal your credit limit, and use the card as you would any credit card. If you’re responsible about paying your bill on time, you could to begin to build a credit history and may be approved for regular credit cards in the future.
  • History of Late Payments:If you pay your bills late on a regular basis, you’re less likely to be approved for a new credit card. Get into the habit of paying on time.
  • Hard Credit Inquiries:When you apply for a credit card or loan, the creditor investigates your credit, and that investigation will appear on your credit report. Avoid applying for too many credit cards in a short amount of time.

Keep in mind that creditors consider many other factors like your income, housing costs, and other information you provide on your application, so these may also contribute to you being declined for a new account.


Published May 5, 2016

Updated January 5, 2022

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