Is it that you have recently applied for a credit card but you were refused by the bank? If yes, then not only is a bad news for your plans with that credit card but also a sign that your credit score is not up to the mark. The alarming thing about low credit score is that it prevents you from getting credit card in the future as well.
The importance of figuring out why your application has been refused for the credit cannot be undermined.
We have abridged the process in 8 simple steps.
- Reach out to the lender
You have the right to know the reason for refusal of your application and what was in your credit report that played the biggest role. If it was majorly because of your credit report, then your lender can tell you which credit bureau they referred to. However, the lender can’t give you a detailed reply about your refusal.
- Look for errors in your credit report and correct them
Take your report in hands and look for errors in it. If you find any error then intimate the credit bureau about it as soon as possible. You will have to furnish proofs, for example if you have paid the credit card in full but it shows that you haven’t paid it in full, then show the receipt of your last payment that you think they have missed.
- Check you are enrolled on the electoral register
You should make sure that you are on the electoral register with the current address. If you don’t have the same address on loan application then you can get troubled. When you fill your application, don’t guess your period of stay at the current address at a particular address. Wrong information can lead to delay or make lenders think that it is some sort of a fraud.
- Don’t have financial ties with people whom you are no more linked to
If you ever had financial ties with your flatmate, for example, then it will show up on your credit report and it can cause negative impact on your score as well. Joint accounts, joint credit applications, or multiple names on utility bills sign towards some financial connections.
Whenever you will apply for a loan this link will definitely show up and the agency will trace the link. If you are no longer associated to these people then you should tell this to the credit bureau. The agency will be able to break the link.
- Stop applying further
If one lender has refused you then the others will refuse you too. Wait until you have fixed all the problems in your credit score before applying again. Multiple credit applications will make you appear desperate for credit and leave traces on your credit report.
- If debt is hindering you then ask for help
Taking more debt to fix older debt is just a temporary solution. Bank of India has Abhay and ICICI bank has Disha centers to help people manage their debts. They offer free of cost advice and help you better deal with your debt.
- Rebuild your credit score
The best way to improve credit score is to make all the current repayments on time. If there is any previous outstanding then clear it. We recommend that you set up a minimum payment direct debit for your credit card and other bills, also.
- Check your report after some time
After making all the corrections and taking above mentioned steps, wait for one month and ask for your report again. You will see what has updated since previous failed application. Examine how well you were able to repair the report.
Before you apply for new credit again, make sure you have done your best to restore your credit score.