Marc Serafino
Having a good credit score doesn’t mean you will automatically get the credit card you want. Even if your score is 850 that doesn’t mean the bank will get you any card you sign-up for.
Sure enough, a good credit score is one of the key factors for getting a credit card but it is not the only one. There are multiple reasons why a bank (or other credit card issuer) can deny you a credit card, some of which we’re going to discuss in this article…
1. You don’t have an income
It is possible to have a good credit score and not have any income. A person may be changing careers, he/she may have retired recently, or he/she has just decided to take some time off. Whatever the reason is, the bank will verify the applicant’s income and based on that decide to approve or decline his/her application.
It is a common sense as far as the bank is concerned; after all, it wants to know that the client will indeed be able to repay any debt he/she has on a credit card.
2. You don’t have the perfect credit history
You may have the excellent credit score at the moment, but that was not always the case. If you had financial issues with a card issuer in the past, you may be denied for some fancy new credit card.
It is rather simple — if there is a high demand for some financial product, the bank or other credit card issuer can pick and choose, and go for the folks with perfect track record. As far as they’re concerned, there’s less risk with such clients.
3. Your credit utilization is too high
Credit utilization shows your current credit card debt in relation to your credit limits. It is the second most important determinant of your credit health, making up 30% of your FICO score.
If your credit utilization is high, you may be denied a credit card even if your credit score is excellent. In order to prevent that, you are best off paying your balances down before signing-up for (another) credit card.
Again, banks want to know that you will be able to, at very least, pay your minimums every month. And high credit utilization number tells them to slow down with that card approval.
4. Your credit is perfect
You may be denied for a credit card even if you have the perfect credit history. If you pay your balances in full and on time, a credit card issuer won’t be able to earn a dime on you. Heck, if we’re talking about a credit card that involves some sort of rewards — cash-back or points — the bank could even lose money with you. And it obviously doesn’t like that.
To be fair, denying people with perfect credit score and perfect credit history seldom happens, but it can happen. Again, we could imagine a situation involving an in-demand credit card when the bank can select which clients are best to have.
5. You are applying for too many credit cards
For banks, applying for too many cards within a short amount of time is seen as a bad thing since it typically means the consumer is trying to get bonuses certain rewards cards are offering. This alarms the bank that you are potentially an unprofitable customer and may not use the card at all once you get the sign-up bonus.
Alternatively, the bank may see you as someone looking to get more credit than they can use, which is a scenario they don’t want to support, either. At the end of the day, they are in the business to make money.
Read next: 5 Things You Can Do to Increase Your Chances of Being Approved for a Credit Card
