Why can’t I get a credit card?

In our last blog ‘What affects my credit score?’ we explained the factors that could potentially damage your credit score. Those included debt amount, credit history duration and credit application timeframes. The next step is to help improve your credit score.

Credit cards remain a popular way for people to manage their finances. Every day in the UK, more than 10 million credit card transactions take place every day. But despite this, many people cannot understand why their application for a credit card is declined.

Often, it’s due to their credit history, but there can be other reasons such as:

1. You’re not old enough - If you’re under the age of 18, you’re ineligible for a credit card. Even if you’re under the age of 21, you may still be required to prove that you have enough income to justify being given credit. This is not to say, however, that you can’t start to build credit if you’re younger than 18 – you can. Refer to our previous blog ‘I run my finances with a debit card – how do I build credit?’ for more on this.
2. You didn’t accurately or completely fill out the application - Our instinctive response is to assume that the fault is on the part of the agency if we feel our application has been wrongly denied (you’re of age, have sufficient income, etc.). But before you reach this conclusion, it’s worth thoroughly checking your application for inaccuracies. It could be something as minor as a simple misspelling or a mistyped digit in one of your details. The application process can be complicated, so there’s value in being wary of this.
3. You have limited credit history - Certain credit cards are wary of accepting people who are entirely new to using credit as they have no means of knowing their level of creditworthiness. Many people find this frustrating as it makes little sense to require a person to have credit history whilst denying them access to a credit card. As counter intuitive as this sounds, it’s a measure they take to protect themselves so they assume you’re a high-risk borrower, as unfair to you as it may be. With this said, there are certain credit cards that support lending credit without necessitating previous credit history. For young adults, there are student credit cards that are available that offer this.
4. Recent credit applications - If you have recently applied for multiple credit cards or loans within a short period of time, it can flag as a concern for credit card issuers. This behaviour is sometimes considered high-risk, so the credit card issuer may deny the application in anticipation of potential future unpaid debt.
5. Specific lender criteria - Each credit card issuer has its own set of underwriting criteria and risk assessment processes. They have specific policies that could result in the denial of certain applications based on factors such as age, employment status, geographical location, or credit history preferences. It’s possible that you are eligible for other credit cards from other issuers, just not this particular one based on any of the above criteria.
6. High debt-to-income ratio - If you have a significant amount of existing debt comparative to your income, credit card issuers may be concerned about your ability to handle additional credit. The way to resolve this issue is to pay off your debts as much as you are able, as obvious as this sounds. This will at least reduce the ratio and so increase your likelihood of being accepted for credit.
7. Your income is too low - Credit card issuers want to be sure that you’ll pay back your debts as taking on a credit card is a risk, not only for them but for yourself. If you’re not making an income, you might have an issue – explore different options; certain cards, for instance a student credit card, do not account income as a factor in making a decision about allowing credit. Rejection isn’t the worst thing in the world, but before you make enough money, racking up debt on your credit card could ruin you financial future – approximately 25% of UK households have persistent credit card debt. This refers to the people who have been paying more in interest and charges than they have been repaying on their credit card balances over an extended period.
   
   

Being denied a credit card can often feel like you are being treated unfairly. The best way to avoid this problem is to accumulate as much evidence in favour of your creditworthiness as possible. By addressing the points above and exploring your options, you’ll find an increase in your creditworthiness and chances of a successful credit card application.