Credit Card Application Denied: 10 Reasons Why | Refresh Financial

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10 Reasons Why Your Credit Card Application Was Denied

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Credit card application denied? Follow these steps and never get denied again!

Having a credit card opens up a whole pile of new freedoms and abilities for most people, but applying for a credit card can get a bit tricky. Often, Canadians will get their credit card application denied without a clue as to why. It’s not just that some cards are harder to get approval for than others, though that is true. Rather, it is often one of the following issues that has led to your credit card application being denied:

1. Your current loan balances are too high

Credit usage is important when it comes to calculating your risk to a potential lender. If the balances on any loans you have are too high, you might look like you can’t afford any new credit. Try to keep your usage down to below 30% before applying for a new credit card.

2. You are carrying a lot of credit card debt

This adds to your credit usage percentage, too, but that’s not the only reason why this is a problem. If your existing credit cards have huge balances on them and you suddenly apply for another credit card, it can make you look as though you basically live off credit. You look like a risk. Get your balances down before applying for another credit card.

3. There are far too many inquiries on your credit report

If you’ve been shopping around, applying for different credit products, you likely have a lot of inquiries on your credit report. This is not a good thing - the more often you have inquiries from lenders checking your credit, the more you look like you might be desperate to get some cash in hand. You’re going to look like a huge risk. Try to keep your inquiries down to one or two per year.

4. Your total income is too low

If it appears you just simply cannot afford to add a new monthly bill to your budget, you will probably get declined. You have two options here: increase your income or lower your living expenses.

5. You may have too many credit cards

Too many credit cards may indicate to your potential lender that you cannot afford another monthly payment. How many credit cards are too many? We discuss in a previous blog post.

6. You have a recent collection or public record

Any negative item on your credit report is only going to improve your chances of a credit card application being denied. Something sent to collections, a bankruptcy, or a consumer proposal is really going to make getting approval difficult.

7. You have recent signs of delinquency

If you’ve missed several payments in a row on a credit product in your name, you’re going to find it very hard to get approval for a new credit product.

8. You have a bad debt on your credit report

When you have failed to pay back funds that you owe and it’s been sent to collections and you still haven’t paid over many years, you’re going to have a bad debt on your credit report. This indicates that the financing has gone into severe delinquency and is unlikely to be paid back. This is a sign to a future lender that you’re a high-risk borrower.

9. Your credit history is limited

If you’re young or just have never made use of much credit before, the credit bureaus can’t really assess what sort of borrower you are. You need to build up a history of credit to have a decent credit score and a chance at being approved for the credit card you want. You may have to start with a secured card or a secured savings loan to start building credit.

10. Your application wasn’t filled out completely

Creditors need to know a lot about you and your financial well-being before they can decide if lending to you is a good idea. It’s a real pain in the neck to have to give out all that information, but if you don’t do it in its entirety, you’re not going to get approval.


If you’re interested in improving your credit score before you apply for a new credit card, Refresh Financial can work with you to create a custom credit building solution that will build your credit score FAST!

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