A reader asks why she can’t get a credit card and what she can do to improve her chances of getting approved in the future.
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Reasons for being declined
There are many reasons you may be declined for a credit card. The most common reason is that you don’t have enough income to qualify for the card. Other reasons can include having too much debt, a history of late payments, or a bankruptcy on your credit report.
Insufficient credit history
One of the most common reasons people are declined for a credit card is because they don’t have enough of a credit history. Credit card issuers like to see that you’ve been using credit responsibly for at least a year before they approve you for a new card.
If you don’t have any credit history, you can start building it by getting a secured credit card or becoming an authorized user on someone else’s credit card. You can also get a student credit card if you’re currently enrolled in college.
Once you have a few months of responsible credit usage under your belt, you can try applying for a new credit card again. You may also want to check your credit report to make sure there are no errors that could be dragging down your score.
Poor credit score
Your credit score is one of the most important factors in determining whether you’ll be approved for a credit card. If your score is below a certain threshold, you’re likely to be declined.
There are a few ways to improve your credit score, but it takes time. You can try to get a secured credit card, which is backed by a deposit you make upfront. Or you can become an authorized user on somebody else’s credit card account. But the best way to improve your credit score is simply to use credit responsibly over time and pay your bills on time.
Maxed out credit limit
If you have a maxed out credit limit, this means that you have reached the maximum amount of money that you are allowed to borrow on your credit card. This can be caused by making large purchases, or by making many small purchases over time. Make sure to keep track of your credit limit so that you do not accidentally max it out. If you do reach your limit, you may be declined for future purchases, or you may be charged an over-limit fee. You can avoid this fee by paying down your balance or by requesting a higher credit limit from your card issuer.
How to improve your chances of being approved
Credit card companies are in the business of making money, so they are very risk-averse. They want to lend money to people who are most likely to pay them back. There are a few things you can do to improve your chances of being approved.
Apply for a secured credit card
A secured credit card is one of the best ways to build or rebuild your credit. With a secured card, you deposit money with the card issuer as collateral. This deposit usually represents your credit limit, which means your risk of default is limited to the amount of money you have on deposit. The card issuer often reports activity on your account to the credit bureaus, helping you build a positive credit history.
If you’re thinking about applying for a secured credit card, consider these tips:
– Choose a reputable issuer: Look for a well-known issuer with a good reputation for customer service.
– Consider your options: Some issuers offer cards with annual fees and others don’t. Make sure you compare the terms and conditions before you decide which card is right for you.
– Read the fine print: Carefully read all of the terms and conditions before you apply for any credit card, but this is especially important with secured cards. Be sure you understand how your collateral will be used and what happens if you default on your payments.
– Manage your account responsibly: Once you’re approved for a secured card, use it wisely by keeping balances low and making all of your payments on time. This will help you improve your credit score so that eventually, you may be able to qualify for an unsecured card.
Become an authorized user on someone else’s credit card
Becoming an authorized user on someone else’s credit card can help improve your chances of being approved for a credit card. When you become an authorized user, you’re essentially piggybacking on someone else’s credit history. This can help improve your credit score and make you more likely to be approved for a credit card.
Get a co-signer
One way to improve your chances of being approved for a credit card is to get a co-signer. A co-signer is someone who agrees to make payments on your behalf if you are unable to do so. Co-signers can be family members, friends, or anyone else who is willing to help you out.
The downside of this option is that if you default on your payments, the co-signer will be responsible for them. This can damage your relationship with the co-signer and make it difficult to get credit in the future.
What to do if you’re still declined
If you’ve been declined for a credit card, it can be frustrating not knowing why. You may have a good income, a solid job, and a great credit score, but you still can’t get approved. In this article, we’ll dive into some of the most common reasons why people are declined for credit cards and what you can do about it.
Try a different credit card issuer
If you’ve been declined for a credit card, it’s important to understand why before you apply for another card. Sometimes, the issuer will tell you why you were declined. If not, there are a few things you can do to figure it out.
First, check your credit report to see if there is any negative information that could be causing the issuers to decline you. If you find something, take steps to correct it.
It’s also worth trying a different credit card issuer. Some issuers are more lenient than others, so you may have better luck with another company.
Finally, make sure you’re applying for the right type of credit card. If you have bad credit, for example, you’re likely to be declined for a rewards card but approved for a secured card.
Consider a prepaid credit card
If you can’t get a credit card, consider a prepaid credit card. You can use it like a credit card for things like online shopping, but you’ll need to load money onto the card first. This can help you build up your credit score over time so that you’re more likely to be approved for a traditional credit card in the future. Just be sure to use the prepaid credit card responsibly and pay off your balance in full each month.