Why can’t I get a credit card?
The reasons why you may not be able to get a credit card are likely to involve:
Your credit history
Your current financial situation
Eligibility for that specific card
Problems with the details you’ve provided on your application form.
When credit card providers decide whether to approve you for a credit card, they’ll check your credit file to see how much you currently owe and how well you’ve managed credit in the past. This tells them how likely you are to pay them back.
Meanwhile, the information you give on your application form about your employment status, income and regular outgoings helps them to assess your affordability. In other words, whether you can afford to pay back what you’re asking to borrow.
Here are some of the most common reasons why credit card applications are declined.
1. Your outstanding credit balance is too high
If you already have several outstanding loans and balances on credit cards, you could be declined for a credit card. This is because the lender may be concerned about whether you can afford more debt.
Credit card providers want to see how much of your available credit you’re using. This is called your credit utilisation ratio. If they think it’s too high, they might see it as a sign you’re struggling with your finances.
2. Your income is too low or you have an unstable work history
Credit card providers tend to favour applicants who have a stable job history. Your application could be declined if a provider thinks you might be unable to keep up with your monthly repayments because you’re regularly out of work.
However, as flexible working contracts and self-employment increases, lenders are updating their policies to accommodate this.
Your credit card application can also be rejected if your income is too low and providers aren’t confident that you can afford the repayments.
3. You have a limited credit history
To be accepted for credit, you have to show you can effectively manage it. This is harder to prove if you haven’t had much (or any) experience of borrowing.
You need at least one account that requires credit, open for three to six months, to generate a credit score. This is a figure used by lenders to assess the risk of lending to you.
You can show lenders that you can be trusted with credit by managing your payments on your utility bills, an overdraft (including an overdraft on a student account) or even a phone contract.
A credit builder card could also be a good option to help you boost your credit score.
4. You’ve made late payments
A late credit repayment will negatively impact your credit score and could increase the likelihood of your application being rejected. That’s because it implies to a lender that you’re less likely to pay on time in the future.
To avoid late payments, it’s a good idea to set up direct debits. After a few months of paying your bills on time, you should see your credit score start to bounce back.
5. You’ve made too many applications for credit
Every time you apply for credit, the lender will carry out what’s called a ‘hard search’ on your credit file. This leaves a mark that other lenders can see. Multiple applications in a short space of time can suggest you’re struggling to manage your finances effectively.
To avoid too many hard checks on your credit file, it’s a good idea to check if you’re likely to be eligible for a card before you apply.
We can help with that. Use our credit card eligibility checker to get an idea of which credit cards you’re likely to be accepted for, without impacting your credit score.
How long does refused credit stay on file?
All credit enquiries are removed from your credit file after a year. But your credit report doesn’t keep track of which applications are approved or refused.
That means a declined credit card application won’t affect your credit score any more than a successful credit card application. It’s the hard credit check the provider runs when you apply that could drop your score temporarily.
6. The lender can’t confirm your identity
Credit providers normally use the electoral roll to verify your name and address, so make sure that you’re registered to vote. And if you’ve recently changed name or address, make sure that the lender is aware to avoid any confusion.
If you’re not able to join the electoral register, you should contact the three main credit reference agencies (Equifax, Experian and TransUnion) and ask them to put a note on your file explaining why.
You may be able to provide other forms of ID and proof of address when applying for credit, but this will likely delay your application.
7. You’re financially linked to someone with a poor credit history
If, in the past, you’ve applied for credit – like a mortgage – with someone else, you’ll be financially tied to that person on your credit report.
Even if you’re only applying for a credit card in your name, a lender may still investigate your financial partner’s credit history when considering your application. If they have a poor credit history, it could reflect badly on your own credit report and hinder your chances of being accepted.
To remove your financial links to a person on your credit file, you can apply for what’s called a ‘notice of disassociation’ from the three main credit reference agencies.
You’ll need to have closed and settled any joint accounts you hold together before you can do this.
8. Errors on your credit file
Your credit report holds information including your current and previous addresses, bank accounts and borrowing history. Sometimes incorrect information can find its way on to your report.
Even a wrongly recorded missed payment can dent your chances of being approved for a new credit card. That’s why it’s important to make sure the information held on your file is correct.
Read our guide to find out how to check your credit report for free.
If you spot any mistakes, report them to the credit reference agency. They must either remove the information within 28 days or tell you why they think it’s correct.
MoneyHelper also recommends talking directly to the lender responsible for providing the information you think is incorrect.
9. Mistakes on your application form
You can also be denied credit if you inadvertently enter incorrect information on your application.
Even seemingly small mistakes, such as not writing your address exactly as it’s shown on the electoral roll, could lead a lender to reject your application.
If you realise you’ve made a mistake on your credit card application, contact the lender to let them know. That way they can review your application based on the correct information.
10. Bankruptcies or county court judgements
Bankruptcies or county court judgements (CCJs) stay on your credit record for six years. So lenders will know that you’ve got yourself into serious financial difficulties.
This makes you a very risky prospect in the eyes of lenders, so you’re likely to be turned down for most credit cards.
However, you could be eligible for credit cards that are aimed at people with bad credit, depending on your circumstances.
Why am I not eligible for a credit card?
You might not meet the eligibility requirements. To apply for a credit card, you’ll need to be:
Over 18 years of age
Legally resident in the UK.
These are the minimum requirements. Credit card providers can set their own eligibility criteria. For example, they may only lend to people aged over 21. Or they may have a minimum income requirement.
Ultimately, it’s up to the credit card provider to decide if you’re a good candidate for their credit card. But to see if you can improve your chances, find out how to build your credit score.
Can I find out if I’ll be accepted for a credit card before I apply?
The final decision is always down to the lender. But you can get a good idea of the cards you’re likely to be accepted for with our credit card eligibility checker.
It will show you the cards you’re likely to be accepted for before you apply. And it won’t leave a mark on your credit report.
Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.
FAQs
How do I find out why my credit card application was declined?
The simplest way to find out the reason you were declined for a credit card is to ask the provider. They’re not required to tell you, but they might.
If they’re keeping tight-lipped, check your credit history and application form, and use this guide to look for possible reasons.
Bear in mind that sometimes it’s just that you don’t fit the eligibility criteria for that card. A credit card provider may, for example, only want customers with very high salaries.
Discover cards you’re likely to be accepted for with our eligibility checker.
Will a declined credit card application affect my credit score?
The rejection itself won’t hurt your score because rejections aren’t recorded on your credit file.
But every time you apply for credit, lenders run a ‘hard’ search, which leaves a mark on your credit report. A single application should see your credit score bounce back within a few months, but too many applications in a short space of time can negatively impact your credit score.
How do I appeal against a refused credit card?
To appeal against a declined application, you’ll need to contact the lender. You’ll usually find details of how to appeal on their website.
How long should I wait to apply for a credit card after being denied?
It’s generally considered best to wait three to six months before reapplying.
The important thing is to try to improve your creditworthiness before applying again. For example, make sure you register on the electoral roll, reduce any outstanding debts and make all your repayments on time.
Compare the Market’s Editorial Team is made up of industry experts with decades of experience in personal finance, insurance and utilities. Each of our authors has an area of expertise, where they can share their extensive experience to help you get a better deal, by finding the right product and saving money.
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