The ratio of the number of applications getting rejected each day is more than the ones that get accepted. Due to so many applications that get rejected, the financial institutions have started concerning more about the applicant’s profiles. The major 10 errors that cause a huge number of defaults are:
A financial institution first and foremost checks the score of the applicant. The credit bureaus like Equifax, CIBIL, Experian consider the economic behaviour of the candidates based on the financial information presented by the banks. A low score based on repayment history, credit mix, loan servicing, etc. defines poor management skills of an individual. Thus, a poor credit history sure shot leads to rejection. A CIBIL score of over 720 is a safe bet while a score lower than the same depicts higher possibilities of defaulting credit card payments. However, there are circumstances where a person can apply for a credit card against a fixed deposit.
The credit card applicants are expected to comply with the income criteria of the banks. The banks worry about loan repayments of Individuals earning less. However, this minimum amount criterion varies from one bank to another.
If a person had applied for a card, got rejected, and applied for a card again after a month, things won’t change. Not even the credit score changes. Thus, if one’s application gets rejected, it is always recommended to wait for a while and fix the reason for rejection. Also, do not apply for multiple cards at a time. Too many applications aren’t favourable in the eyes of banks. Multiple rejections cause enormous loss of one’s reputed credit history.
The applicant shouldn’t be too young or too old. The credit cards or usually offered to people between 18 – 60 years of age. This is because, this is a time where one earns regular monthly income.
It is difficult for the self-employed professionals to apply for credit cards compared to salaried people. Even if the self-employed earn a better income, the banks might reject their application. This is because their no regular and steady income the independent professionals earn. Theres a huge risk involved with their work. Moreover, individuals working with large multinational companies or firms listed in stock exchange are more favoured for credit cards.
Consider a situation where one moves from one place to another for a better job and a lifestyle and are living in a rented house. If the address is previously in the defaulter's list, the applicant's request is likely to get rejected. This is also possible if the claimant’s family member lives at the same address and is defaulter blacklisted by the banks.
This happens when the applicant has recently changed their residence and has not provided the proof for the same. There are immense chances of rejection as the bank verifies the permanent address and finds it to be fake as of now. Thus, it is vital for every applicant to give correct and updated information to the banks. Proofread all the content in your application before submission.
If a person thinks he is smart enough to take credit from the bank and pay other dues and continue making multiple transfers, then he is wrong. The credit report helps the banks realise the same and smartly reject the application. The balance transfer facility is offered only in case of an emergency. Any misuse is intolerable.
There might be slight errors on which the applicant failed to concentrate while filling in the form. For example, he missed a digit while mentioning salary or a phone number or there’s a mismatch of the signature. All such instances evade the applicant from getting a credit card.