It is a well known fact that the whole America is running on the plastic money today. Each month and each day, people are carrying less cash and using credit cards to make transaction wherever possible. The plastic money has taken over the country and hard cash has taken a back seat. The reason is, of course, the idea of buying whatever you like and then paying later. But this trend seems to have caused a lot of problems related to unpaid debts and the declination of new credit card applications.
Let’s take a look at some of the reasons behind people getting rejected when applying for a new credit card.
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#1 The income from your job is too low.
All new credit card application contains a section regarding your job and income level. This is to see if you can pay back. It could be problematic if you have an income of $20,000 and a poor credit score.
To show a strong set of income to the credit card issuer, you can include the annual income of your partner with yours. Showing a high level of income assures the credit card issuer that you have a steady income and you can pay back the money you have spent through your credit card. If you look closely, many credit card forms do not ask about your income in specific. This gives you a chance to show the income proof for both of your partners.
#2 How many inquiries did you have?
An inquiry is a way of informing the credit card issuer that a person has entered the market to get some credits. An individual’s credit history can store the data of inquiries for two years but not every inquiry is the same.
This means that a person having different loan inquiries and credit card inquiry is likely to have a better credit profile than someone having too many credit card inquiries.
A credit card issuer will feel assured only if you have a lesser number of inquiries. This shows that you do not need credit every time and thus, your form can be approved quickly.
#3 You have a high Revolving Account Balance
If your application was rejected for having pending balance in different accounts, you must pay some of these account balances before applying again. A credit card issuer sees the level of your debt and approves or declines accordingly. It would be favorable if you have a low debt level.
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#4 Having a number of negative credit accounts.
Are you aware of the amount of damage a couple of negative credit account can do to your credit history? You must remember that more than one negative credit account can hamper your turn of getting a new credit card with a decent interest rate. A better idea would be to work closely with your lender to clear off your negative accounts. Talk to them to design a payment schedule as no lender wants to sell off your debts for mere nickels.
#5 Do you have a high Debt-to-Credit Ratio?
This is where having a good credit score comes into play. With a decent credit score, your chances of getting a fee-free credit line with amazing terms will definitely come handy during those rainy days.
A credit card issuer always looks for a satisfactory credit history. If you have too many maxed out accounts along with high debt ratio, they will never give you an approval. On the other hand, if you have a few remaining credit lines but still chose to get a new credit card, they will happily extend their arms to do business with you.
You must keep these things in mind and pay off any remaining debt you have. If you wish to seek any consultation, suggestions, help or advice, you can contact Wells Fargo customer care and get the desired help.