Application denied - why the credit card company turned you down
You can't understand it. All the details were filled in correctly, you haven't missed any payments but still the credit card company has rejected your application. For a business that almost seems to guarantee acceptance, the sting of rejection can be a bitter pill to swallow. But before you give way to righteous indignation there are plenty of reasons why you may have been turned down, and not all of them are the fault of the credit card company. A credit card rejection does not necessarily mean you have a bad credit rating. It could be just a simple mistake.
Credit companies are required by law to tell applicants exactly why they have been rejected for a credit card application, although these letters are often standard templates and can be lacking in real detail. The first course of action is to determine the exact reason why the company has turned your application down. Although mistakes are rare, they do happen - the system is not infallible. The lender is also compelled to send you a document providing details of the credit agency they used to obtain your credit history - although bear in mind that currently lenders are using two or even all three of the UK agencies to obtain information. If checking the details supplied by the agencies throws up any mistakes then you have the right as a consumer to contact the agency and rectify the error. A simple clerical mistake could seriously affect your financial health.
A credit report request incurs a small charge, but it gives you that all-powerful weapon - information. The credit agency will give you all the details they hold on you and are perfectly willing to made amendments if you come across an inaccuracy. Contrary to popular belief, there is no 'black list': credit agencies do their very best to make sure that information held is accurate and relevant, but no system is perfect. Once you have got the agency to correct your details, you could then appeal against the initial rejection by the credit card company; however, these cases rarely succeed. A better plan may be to wait a short while for the information to filter down, and then reapply.
Your credit 'score' is a mysterious enigma, usually the preserve of the banks and credit card companies. Accessing this report is a consumer's right and is a vital part of your financial management. There are three main credit agencies in the UK, all covered by full disclosure law and required to supply you with your record on demand. Your credit rating is affected by your past financial history including loans, repayments and details of how you run your finances. 'Black data' (information on late payments, defaults, CCJs and other negative aspects of credit management) is shared between financial lenders, but increasingly 'white data' is being shared too. White data tells the lenders about your financial management skills and can determine how attractive a customer you are to them. A customer who pays each monthly balance in full, takes advantage of 0% offers and appears to be the perfect credit client is, in fact, not an ideal credit card customer. Card companies like customer loyalty, and if you card jump too often, your credit rating can suffer as a result.
Something as simple as forgetting to register on the Electoral Role can damage your credit rating. The Electoral Role is the primary source for lenders to confirm your address so if you're missing, the lenders have to assume that your address is unconfirmed. Bang goes any chance of getting a credit card or other loan, just through a simple mistake on your part. If you are registered then you can amend this information with the credit agencies and you're back in business. If you are turned down by several companies there may be a deeper problem, and one that requires more attention and effort on your part to rectify. Don't just hope the problem will sort itself out - you need to be proactive when it comes to managing your finances. Pay your bills on time, meet your repayments on outstanding debts and build your credit rating back up to more attractive levels.
If you have been rejected for a credit card, don't reapply straight away. Give yourself a cooling-off period of about 90 days to get your financial house back in order. Check your credit history for any errors and prove to the lenders that you aren't a credit risk by rectifying any problems that led to the initial rejection. Avoid multiple applications in the hope that one of the companies will let you slip through the net. A plethora of rejections on your credit history will do more damage, meaning you have to wait even longer to get back into the lender's good books. The only ways to improve your chances are through good financial management, an eye for detail and a willingness to take back control of your financial affairs.
Credit companies are required by law to tell applicants exactly why they have been rejected for a credit card application, although these letters are often standard templates and can be lacking in real detail. The first course of action is to determine the exact reason why the company has turned your application down. Although mistakes are rare, they do happen - the system is not infallible. The lender is also compelled to send you a document providing details of the credit agency they used to obtain your credit history - although bear in mind that currently lenders are using two or even all three of the UK agencies to obtain information. If checking the details supplied by the agencies throws up any mistakes then you have the right as a consumer to contact the agency and rectify the error. A simple clerical mistake could seriously affect your financial health.
A credit report request incurs a small charge, but it gives you that all-powerful weapon - information. The credit agency will give you all the details they hold on you and are perfectly willing to made amendments if you come across an inaccuracy. Contrary to popular belief, there is no 'black list': credit agencies do their very best to make sure that information held is accurate and relevant, but no system is perfect. Once you have got the agency to correct your details, you could then appeal against the initial rejection by the credit card company; however, these cases rarely succeed. A better plan may be to wait a short while for the information to filter down, and then reapply.
Your credit 'score' is a mysterious enigma, usually the preserve of the banks and credit card companies. Accessing this report is a consumer's right and is a vital part of your financial management. There are three main credit agencies in the UK, all covered by full disclosure law and required to supply you with your record on demand. Your credit rating is affected by your past financial history including loans, repayments and details of how you run your finances. 'Black data' (information on late payments, defaults, CCJs and other negative aspects of credit management) is shared between financial lenders, but increasingly 'white data' is being shared too. White data tells the lenders about your financial management skills and can determine how attractive a customer you are to them. A customer who pays each monthly balance in full, takes advantage of 0% offers and appears to be the perfect credit client is, in fact, not an ideal credit card customer. Card companies like customer loyalty, and if you card jump too often, your credit rating can suffer as a result.
Something as simple as forgetting to register on the Electoral Role can damage your credit rating. The Electoral Role is the primary source for lenders to confirm your address so if you're missing, the lenders have to assume that your address is unconfirmed. Bang goes any chance of getting a credit card or other loan, just through a simple mistake on your part. If you are registered then you can amend this information with the credit agencies and you're back in business. If you are turned down by several companies there may be a deeper problem, and one that requires more attention and effort on your part to rectify. Don't just hope the problem will sort itself out - you need to be proactive when it comes to managing your finances. Pay your bills on time, meet your repayments on outstanding debts and build your credit rating back up to more attractive levels.
If you have been rejected for a credit card, don't reapply straight away. Give yourself a cooling-off period of about 90 days to get your financial house back in order. Check your credit history for any errors and prove to the lenders that you aren't a credit risk by rectifying any problems that led to the initial rejection. Avoid multiple applications in the hope that one of the companies will let you slip through the net. A plethora of rejections on your credit history will do more damage, meaning you have to wait even longer to get back into the lender's good books. The only ways to improve your chances are through good financial management, an eye for detail and a willingness to take back control of your financial affairs.
About the Author:
James Baker is an experienced financial writer that likes to simplify the financial jargon for the public. Find out more information on the credit card application here.
posted by Debt Consolidation Loan at
7:49 AM
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