Rejection of your Credit Card Application

Up to a third of credit card applications in the UK are rejected. There are a number of reasons why your application for a credit card might be unsuccessful. In recent years, banks and credit card companies have been criticised for being too eager to lend and promote credit cards, even to people who could not afford them. However, as the recent 'credit crunch' took hold, credit card providers have become much less inclined to accept applications.

When you fill in a credit card application form, there will be a period of time in which the card provider assesses your credit 'worthiness', that is, how much risk there is of you getting into debt. They will prepare what is called a 'credit score' based on your credit report. Your credit report is a document that details your past ability to gain credit and make repayments on time. It is maintained by an independent credit agency (see Credit Rating) and updated each time you apply for credit, or fall into arrears (fail to make a monthly repayment on time). Any credit card provider is allowed to view this report when you make an application.

The main reasons why your credit card application could be rejected are:

No Credit History
If you have not needed to borrow money in the past, you do not have a credit history. For a credit card provider this will mean that they have no 'past performance' to consider when evaluating your application. In today's credit crunch climate, banks may reject your application on the grounds that you do not have a track record of good debt management and are therefore a risk for them.

Past Performance
Credit card providers will consider you to be a risk customer if you have missed repayments in the past. Any missed credit repayment will remain on your credit report for three years. Too many credit card applications and report searches recorded on your credit report will also be regarded as unfavourable. If you had serious financial difficulty in the past, you may have had a County Court Judgement (CCJ) issued against you. A CCJ is a court order that decides how much you owe to a creditor and how you should repay it. For one to be issued, one of your credit providers, for example your mortgage provider, will have taken County Court action against you to reclaim outstanding repayments. CCJs deter credit card providers from lending you money, and should be avoided at all costs.

Too Much Credit
If you already have a number of different credit cards, your available spending limit may already be very high. When you apply for a new card, the credit card provider will assess your total available credit. If they believe that it is already too much in relation to your income, they may reject your application on this basis even if you have perfect credit history. Many people apply for a number of different credit cards to improve their credit rating quickly, since each repayment that is made on time shows that you can efficiently manage your money. Whatever your reasons may be, if the total credit limit of all these cards exceeds what the credit card provider believes your personal finances afford, they will adjust their credit offer accordingly or even refuse your application altogether.

Home Phone Number Verification
If you fail to give a home phone number, or if the one that you give on your application does not match that on your credit report, your lender is unable to verify it. As a result your application may be rejected. The two main reasons for this are: if you fail to make repayments they would not be able to contact you; and the absence of an accurate home phone number may indicate that somebody else is trying to fraudulently fill out a credit card application in your name.

Electoral Roll
One of the seemingly trivial, but often reported reasons for the rejection of a credit card application, is the electoral register not corroborating the information you gave on your application form. Credit card providers use the electoral roll to confirm your name and address. If you are not registered, or are registered at a previous address, your application may be refused.

New Product Launch
You may find it hard to be approved for a credit card that has only just been launched by the card provider. This is because they initially aim to attract a specific type of customers; if you do not fit the profile, they may reject your application on this basis. Usually however, they will offer you a different deal which they think may suit you: read all the terms and conditions carefully, since these alternative deals are rarely as good as the deal for which you applied.