There is nothing more frustrating than getting your credit card application denied despite having excellent credit. Credit scores are not everything when it comes to getting credit. Your income, recent credit applications and late payment, debt to income ratio, and your job history can come in to play.
Here are a few common reasons why credit card applications are denied. Few are easy to fix with a phone call while some can be harder.
You recently moved to a new address
This is one of the most common reasons credit card applications get denied. You apply for a credit card with your new address but that address doesn’t match what is on your credit report.
People applying for store credit cards such as Lowe’s or Home Depot run into this issue often. They are ready for their big home improvement project on their new house and their credit card application is denied because they just moved.
You have a freeze or lock on your credit
Credit freeze or lock restricts access to your credit file. When you freeze your credit at the three credit bureaus, lenders cannot see your credit file. This prevents anyone from opening a credit account in your name.
Many people apply for credit forgetting that their credit is frozen or locked the three credit bureaus. Unfreezing or unlocking your credit resolves this problem quickly.
Too many credit inquiries in recent months
If you have multiple hard inquiries in a span of a few months, it shows that you are trying to get credit desperately. Banks are likely to think that you are a risky borrower and hence decline your application.
You got tripped by Chase’s 5/24 rule
If you applying for a Chase credit card, you need to understand Chase’s 5/24 rule. If you have opened 5 or more new credit cards in the past 24 months from any issuing bank Chase will not approve your credit card application. Chase uses a rolling count to determine the number of credit cards opened in the last 24 months.
What can you do about it?
Under the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA), creditors are required to provide you a notice outlining reasons why your credit was denied.
Many banks have a “reconsideration line” that you can call and ask for a second look on your application. Though there is no guarantee that your application will be approved, you can provide additional information that may lead to approval. I know many people who have been approved for a credit card after calling the reconsideration line.
Time is of the essence when calling the bank to reconsider your application. You should call within 30 days of the denial in most cases. When you call, the credit card representative will review your case and ask you a few questions. If you recently moved or had your credit frozen, you will want to mention this to the representative.
Getting declined for credit when you have an excellent credit score can be frustrating. Find out if you got tripped up by any of the factors listed above. Try calling the reconsideration line of the bank and explain your reasons. There is a good chance you will get approved for your credit card.