- Uswitch.com>
- Credit Cards>
- Why Can’t You Get a Credit Card?
Why can’t you get a credit card?
Our handy guide explains why you may have been rejected for a credit card and what you can do to increase your chances of a successful application next time.
Being turned down for a credit card can be frustrating. If it happens to you, it’s important to find out why your application has been rejected and take the necessary steps to prevent it from happening again.
What are the reasons for being declined a credit card?
Some of the reasons you might be declined a credit card include:
A poor credit score
A low credit score suggests you’ve had problems repaying debt in the past. Lenders may view this as a red flag and be reluctant to let you borrow.
A limited credit history
If you have no history of repaying debt, lenders cannot assess whether you’ll be a good applicant. As a result, they may not offer you a credit card.
Late payments
Missed or late credit payments can negatively impact your credit score. Lenders might be concerned that history will repeat itself and could be unwilling to offer you a credit card.
Bankruptcies and County Court Judgments (CCJs)
Notifications about bankruptcies and CCJs stay on your credit record for six years and are strong indicators that you’ve had problems managing your finances in the past. Individuals with these notifications are viewed as higher risks, meaning that they’re less likely to receive credit.
Too many credit applications
If you’ve made a lot of credit card applications in a short space of time, lenders may believe you’re desperate for cash and struggling to manage your finances.
Mistakes on your application
Even small mistakes, such as the wrong address, can result in a lender refusing your credit card application. Be sure to read through your application carefully before submitting it.
Your employment history
Lenders want proof of stable employment and may also insist on a particular income level to ensure you can meet the repayments. You could be turned away if you don’t satisfy these requirements or frequently change jobs.
A high level of existing debt
Lenders may be concerned about your ability to meet the repayments on a new credit card if you already have a lot of existing debt from cards or loans. A high credit utilisation ratio (the percentage of total available credit you’re using) can suggest you’re struggling with your finances.
Financial links to someone with poor credit
If you have a joint current account or mortgage, your credit report shows a financial link between you and the other borrower. If the other person has bad credit, this can affect your chances of being accepted for a credit card.
What are the eligibility criteria for getting a credit card?
The exact criteria will depend on the lender, but generally, you’ll need to be at least 18 years old and a UK resident to get a credit card.
In some cases, you may need to be over 21. Some lenders also specify a minimum income level. Others only accept people who haven’t had a CCJ or filed for bankruptcy in the past year.
Does being rejected for a credit card affect your credit score?
A rejected credit card application won’t directly affect your credit score. Lenders don’t report whether your applications were approved or declined, so this won’t show up on your credit report.
However, credit reports do list how many times you’ve applied for credit. Each hard credit check will show up on your credit file and can temporarily lower your credit score. Too many applications in a short space of time can have a bigger impact on your credit score.
What happens if your credit card application gets rejected?
If your credit card application is turned down, try to find out why (if you don’t already know). You can do this by asking the lender. You may discover that your credit score was too low or your income didn’t satisfy its criteria.
You should then check your credit report to ensure there are no mistakes in your personal details or payment records. You can check your credit report for free with any of the three main credit reference agencies (CRAs) – Experian, Equifax and TransUnion.
If you find any mistakes, contact the CRA or credit provider to get them corrected (read how to dispute your credit report for more information). You should also contact the CRA if you discover that you’re still financially linked to someone you no longer have an account with. You can request a ‘notice of dissociation’ to remove the link from your credit file.
If your credit score is poor, take steps to improve it, such as:
Ensuring you’re on the electoral roll
Paying down debts
Making household bills and debt repayments on time
Reducing your credit utilisation ratio – keep it below 30% if you can.
When should you apply for another credit card?
It’s best to wait at least three months, and preferably six, before applying for a credit card following a rejection.
Before applying, it’s worth using an eligibility checker as this will show you the credit cards you will most likely be accepted for. Eligibility checkers only carry out a soft search and won’t affect your credit score. Once you’ve found a suitable card, you can complete and submit the application form. A hard check will then be carried out.
If you’re struggling to be accepted for a credit card due to a low credit score, you could apply for a credit builder credit card. These are designed specifically for those with low credit scores or no credit history and often have more lenient eligibility criteria.
However, credit builder cards tend to offer low credit limits and high interest rates, so it’s important to pay off your balance in full each month. If you use it sensibly, you can start to build your credit score, which could give you access to more competitive credit cards in the future.
Compare credit cards with Uswitch
Compare a range of our popular credit cards from 0% cards to rewards, balance transfer to cashback cards.