Having a delinquency on your credit report can also make it more challenging to get approved for a credit card as banks see you as a high-risk applicant. Whether you’ve missed a payment or experienced a financial setback that led to your debt going to collections, having a delinquency on your record can significantly impair your credit score and make it very hard to get approved for most credit cards. So, if you do have a delinquency on your report, work to resolve the issue and settle any amounts in collections before applying for new credit.
5. You’ve applied for a lot of credit recently
Applying for several credit cards in a short time can be a red flag. Lenders can view this as a sign of desperation for credit and worry that you’re borrowing more than you can handle, which could affect your ability to make the minimum payments.
In addition, every new credit-card application generates a hard inquiry that will lower your credit score. Hard credit inquiries account for 10% of your credit score so it is important to only apply for new credit products you need, one at a time. If you’re rejected for a credit card, wait between three and six months before reapplying to limit the impact of hard inquiries.
6. You have too much debt
If you already have a lot of debt through loans, mortgages and high credit-card balances, opening a new credit card could be seen as a warning sign to lenders that you are having problems paying down your existing balances. They might flag you at a higher risk of defaulting and reject your application.
When it comes to assessing your creditworthiness, lenders focus not just on the amount of debt you owe, but also look at how much of available credit you’re using. This is known as credit utilization, which makes up 30% of your credit score. Try to keep your utilization under 30% of available credit for maximum positive impact on your score. For example, if you have $10,000 in total credit available to you, try not to carry a balance of more than $3,000 at any given time. This shows lenders you can manage your credit responsibly.
7. There’s an error on your credit file
If you’ve been turned down for a credit card (even if you have an excellent credit score), but have no debt and a clean payment history, it’s worth checking your credit report for errors. Incorrect payment details could be affecting your credit score—and, in turn, your eligibility to get approved for new credit.
You can identify this by reviewing your credit report regularly to see what’s documented and make sure the information is correct. For no charge, you can remove incorrect information by filing a dispute directly with the credit bureau.
8. You don’t meet the age requirements
In Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Prince Edward Island, you must be at least 18 years old to obtain credit. In all other provinces and territories, the minimum age is 19. If you don’t meet these age requirements, your credit card application will automatically be denied, so hold off until you are eligible.
