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What to do if my credit card application is declined

Updated: Jan 18

No one likes to receive an email or SMS on their phones advising them that their recent credit card application has been denied.


Not only does it have a potentially negative impact on your credit score, but can also give you intrusive thoughts of "What if I will never be approved?" This is especially true, when you are credit card churning or collecting points for you next holiday.


Currently 13.7 million Australians have a credit card. On average, 8% of all application are rejected, with the amount of rejections increasing in 2023. Of those who have had their credit card application denied, the following have been the most common reasons:

  • 36% because of unsteady income.

  • 22% because of too much debt.

  • 21% because of bad credit history or credit score.

  • 21% because of other factors such as those listed below.

If your credit card application has been rejected, don't throw in the towel yet! I will show you a couple of different ways you can try to increase your chances of being approved, or at least get your application reviewed in the hope that the credit card issuer will approve you.

Bank application form
8% off all credit card applications get denied. Don't be a statistic. Find out how to increase your chances of approval.

Reasons why you got rejected


Credit card companies have their own proprietary software, which based on the application form, personal situation and your credit history will determine if your application will be accepted or denied.


There is no way to know the exact reasons why you may have been denied. This doesn't mean we can't use common sense to understand the most important factors in getting approved.


If you can understand why you have not been approved, then it gives you the possibility to rectify the issues in the future. The key reasons why you may have not been approved are the following:


You were not eligible:

This is probably the least likely, but the first to cross off the list. Make sure you meet the bare minimum eligibility requirements. These are further discussed here. Usually, the application will not let you even get this far, however, if it does, then if you don't meet these requirements you will be instantly rejected.

  • Be over 18 years of age

  • Be an Australian citizen

  • Have not had previous defaults

  • Have an annual income over the required threshold as per the credit card terms



The information on your application was not correct:

The most obvious issue, which is usually the most common, is that there were errors in your application form. These could range from details about yourself that were not able to be verified, to plain mistakes on the application form.


It's important to double-check the information you put onto your application and verify that it is correct and current.


Most of the time if there is incorrect information, the bank will usually contact you giving you the opportunity to correct it. However, this is not always the case.


Your income or employment does not satisfy the requirements:

Every application will require proof of income and where that income comes from. If the income does not meet the minimum required income, then you will not be approved for the credit card.


Also, your job status has a role to play. For example, full time employment is seen as more favourable than casual employment, even though your yearly pay may be the same. How long you have been with your employer and your employment field are also important and play a role in your credit card being approved.

Your debt to income ratio:

As part of the application process, you will need to answer some personal questions about your spending habits and ongoing expenses.


This includes any home loans, personal loans, or other liabilities you may have. If these are deemed too high compared to your income, then you will also be rejected.


Don't think about lying in this section as the banks will have guidelines on what is considered normal spending for your circumstances. So best to be honest.


The credit amount you are applying for will also have an impact on your application as it will be added to your debt calculations.


Your dependants:

One overlooked question is the dependants question. This plays a large role in deciding if you will be approved, as the bank considers you at higher risk if you have more dependants.


Your credit history:

Finally, your past credit history is also looked at to decide if you will be approved. This takes into account how many credit card inquiries you have made and how often. How many previous rejections you have had? Have you paid off your past debt obligations?


These factors create a credit report and this report gives you a score. The higher the score the less of a risk you appear to be.


You can check this report using a site like credit savvy. Or have a look at my getting started page for more information.


Bank building
If your credit card application is rejected, the first step you should take is to call the bank to follow up

So you've been rejected. What are some steps to take moving forward?


Call your bank:

Calling your financial institution is the first step you should take. Many people feel awkward calling up and do not like to talk to an operator. They feel they will be rejected further, judged, or misunderstood by someone they deem to be of authority.


Other than the possibility of long waiting times, the easiest way to find out why you were rejected and amend the problem is by talking to someone over the phone. it can be easier for some to use an internal messaging system.


Calling allows you to talk to several people at once and ask questions on the fly to figure out what the issue could be.


During my credit card churning journey, I have called up the banks several times when I had an issue with being approved.



On one occasion, it was a simple error with my financials compared to my payslips. This was rectified straight away and I was approved that evening.


Another time was to do with a previous credit card I thought had been cancelled, which was still showing as not closed, even though I had received the letter of closure from the bank. My credit card was not being approved because I had too many credit cards open, which were seen as debt.


I sent this letter of closure as an attachment to the new credit card issuer, to prove this card was no longer held by me and was also approved later that week.


So please, always call the bank and have a talk with them. They are always willing to help and will let you know everything they are allowed to disclose, to help you get approved for one of their products.


Remove your credit inquiry from your credit report:

If you have called up the bank and they still will not approve your credit card application and there is nothing else you can do, then you can always ask to remove your credit inquiry if you are worried it will prevent you from credit card churning in the future due to impacting your credit score negatively.


To get your credit card enquiry removed follow the below process.

  • Contact your consumer credit agency by mail, phone, or by filling out an online form to file a dispute.

  • Write a letter to the credit bureau mentioning why you are writing and why you are disputing your inquiry. Make sure you have evidence of your reasoning from your bank if you believe it was not your fault for being rejected.

  • Notify the creditor before sending the request that they remove the inquiry from your report if you plan to bring a dispute to court. This will provide you with proof that you have notified the credit issuer or lender of your request.

  • If you want you can also request help from a credit repair agency to assist you with the process if it starts to get too difficult.

How long should you wait before you consider applying again?


This is not an easy question to answer, as again, it is variable and depends on a lot of parameters.


This is because the new credit card provider might wonder why you got rejected only a couple of days ago and decide that you are too high a risk of a customer and decline your application.


Some banks have policies to wait a predetermined amount of time which they will communicate to you if asked.


Conclusion


In summary, if your credit card application is denied, please call the bank, to follow up. You never know, it might just be a simple fix to get your credit card approved and in your hands ready to earn signup bonuses.


Most importantly, make sure you have a good grasp of what the prerequisites to get approved are, and make sure you meet all these prerequisites. Also make sure you are truthful in your application, that it is accurate, and that all your personal details are correct.


Like always, if you have any questions, please comment below or contact me. If you don't want to miss out on any new content, then follow me on Instagram or Reddit for more information about everything to do with credit card churning and point collecting.






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