Computer says no - turned down by the credit card company?
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.
For a small fee, all UK credit agencies will send you a complete report of your credit history. This includes details on your address, occupation and income as well as financial history and credit background. The agencies are required by law to correct any mistakes highlighted by consumers, making sure that details are accurate and up to date. Once you have rectified any errors you can reapply to the original credit card lender or even appeal against the initial rejection, although these cases rarely succeed. It may be wiser to wait a little while and then resubmit an application.
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.
Credit card application denial can be the result of a range of issues, from the simple to the complex. Something as basic as forgetting to send off your electoral registration can mean that your credit rating drops - the credit card company simply doesn't have any proof of your address. Mistakes like this can be rectified easily, improving your chances of being accepted next time you apply for a credit card. If you are turned down repeatedly by several companies it may indicate a bigger problem with your credit history. This isn't the time to bury your head in the sand and hope it'll get better on its own. You can take positive steps to rectify the situation. By making sure you pay your bills on time, pay off debt rather than shifting it around and managing your score, you can stay in charge of your credit rating.
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.
For a small fee, all UK credit agencies will send you a complete report of your credit history. This includes details on your address, occupation and income as well as financial history and credit background. The agencies are required by law to correct any mistakes highlighted by consumers, making sure that details are accurate and up to date. Once you have rectified any errors you can reapply to the original credit card lender or even appeal against the initial rejection, although these cases rarely succeed. It may be wiser to wait a little while and then resubmit an application.
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.
Credit card application denial can be the result of a range of issues, from the simple to the complex. Something as basic as forgetting to send off your electoral registration can mean that your credit rating drops - the credit card company simply doesn't have any proof of your address. Mistakes like this can be rectified easily, improving your chances of being accepted next time you apply for a credit card. If you are turned down repeatedly by several companies it may indicate a bigger problem with your credit history. This isn't the time to bury your head in the sand and hope it'll get better on its own. You can take positive steps to rectify the situation. By making sure you pay your bills on time, pay off debt rather than shifting it around and managing your score, you can stay in charge of your credit rating.
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 takes an interest in providing the public with information about personal finances and help with simplifying the often confusing information that comes with the finance sector. Find out more information on the credit card application here.
posted by Debt Consolidation Loan at
7:50 AM
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