Everyone feels slighted if their application for a credit card is denied, especially as so many cards seem to offer almost guaranteed approval. There are a plethora of possible reasons for rejection, so the first thing to do is not to panic. A credit card rejection does not necessarily mean that you have a poor credit rating. It could be just a simple mistake, a problem with your address or a clerical error. Even the slightest thing can tarnish an otherwise impeccable record. But there are things you can do to polish up your credit rating and get your finances moving again.
Lenders are legally required to send rejected applicants a letter explaining the reasons for turning down a credit card application. Sometimes these letters can be vague, only covering the bare minimum requirements. So the first thing to do is follow it up and make sure that the company has denied your request for legitimate reasons. Although rare, mistakes can and do happen. The lender is also legally required to send you documentation stating which credit agency they used to obtain your credit history (although some lenders now use all three of the primary agencies). If your cross-referencing throws up obvious mistakes, you can contact the agency involved and have the mistake corrected. That simple error could be affecting your finances far more than you think.
A credit report request incurs a small charge, but it gives you that all-powerful weapon - information. The credit agency will give you all the details they hold on you and are perfectly willing to made amendments if you come across an inaccuracy. Contrary to popular belief, there is no 'black list': credit agencies do their very best to make sure that information held is accurate and relevant, but no system is perfect. Once you have got the agency to correct your details, you could then appeal against the initial rejection by the credit card company; however, these cases rarely succeed. A better plan may be to wait a short while for the information to filter down, and then reapply.
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.
Something as simple as forgetting to register on the Electoral Role can damage your credit rating. The Electoral Role is the primary source for lenders to confirm your address so if you're missing, the lenders have to assume that your address is unconfirmed. Bang goes any chance of getting a credit card or other loan, just through a simple mistake on your part. If you are registered then you can amend this information with the credit agencies and you're back in business. If you are turned down by several companies there may be a deeper problem, and one that requires more attention and effort on your part to rectify. Don't just hope the problem will sort itself out - you need to be proactive when it comes to managing your finances. Pay your bills on time, meet your repayments on outstanding debts and build your credit rating back up to more attractive levels.
Before reapplying for credit cards, giving yourself a 90-day period to get your house in order can raise your chances of being accepted the second time around. Get your bills paid, catch up with any arrears and show the credit card companies that you're a good investment. Avoid multiple applications - they can do your credit rating more harm by having a cluster of rejections on your record. A pragmatic approach to financial management and a little patience are the best ways to turn you into an attractive proposition for credit card companies. - 15224
Lenders are legally required to send rejected applicants a letter explaining the reasons for turning down a credit card application. Sometimes these letters can be vague, only covering the bare minimum requirements. So the first thing to do is follow it up and make sure that the company has denied your request for legitimate reasons. Although rare, mistakes can and do happen. The lender is also legally required to send you documentation stating which credit agency they used to obtain your credit history (although some lenders now use all three of the primary agencies). If your cross-referencing throws up obvious mistakes, you can contact the agency involved and have the mistake corrected. That simple error could be affecting your finances far more than you think.
A credit report request incurs a small charge, but it gives you that all-powerful weapon - information. The credit agency will give you all the details they hold on you and are perfectly willing to made amendments if you come across an inaccuracy. Contrary to popular belief, there is no 'black list': credit agencies do their very best to make sure that information held is accurate and relevant, but no system is perfect. Once you have got the agency to correct your details, you could then appeal against the initial rejection by the credit card company; however, these cases rarely succeed. A better plan may be to wait a short while for the information to filter down, and then reapply.
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.
Something as simple as forgetting to register on the Electoral Role can damage your credit rating. The Electoral Role is the primary source for lenders to confirm your address so if you're missing, the lenders have to assume that your address is unconfirmed. Bang goes any chance of getting a credit card or other loan, just through a simple mistake on your part. If you are registered then you can amend this information with the credit agencies and you're back in business. If you are turned down by several companies there may be a deeper problem, and one that requires more attention and effort on your part to rectify. Don't just hope the problem will sort itself out - you need to be proactive when it comes to managing your finances. Pay your bills on time, meet your repayments on outstanding debts and build your credit rating back up to more attractive levels.
Before reapplying for credit cards, giving yourself a 90-day period to get your house in order can raise your chances of being accepted the second time around. Get your bills paid, catch up with any arrears and show the credit card companies that you're a good investment. Avoid multiple applications - they can do your credit rating more harm by having a cluster of rejections on your record. A pragmatic approach to financial management and a little patience are the best ways to turn you into an attractive proposition for credit card companies. - 15224
About the Author:
James Baker is an experienced financial writer that likes to simplify the financial jargon for the public. Find out more information on the credit card application here.
