5 steps to reapply for a credit card

Learn about common reasons for rejection and steps to reapply.
5 steps to reapply for a credit card
2 min read
29 July 2023

There could be varying reasons for your credit card rejection. One of them is frequent credit card applications within a short period. Other reasons could be prior defaults on loans or repayment delays.

Let us understand the 5 reasons for a card rejection.

  1. Insufficient credit score: A low credit score is one of the primary reasons for credit card rejection. Lenders assess your creditworthiness based on your credit history, and a low score may indicate a higher risk of defaulting on payments.
  2. Unstable income: Lenders prefer applicants with a stable and sufficient income to ensure timely repayments. If your income is not up to the lender's requirements, your application may be declined.
  3. High debt-to-income ratio: A high debt-to-income ratio, where your debt obligations are significant compared to your income, may raise concerns for lenders and lead to rejection.
  4. Multiple credit applications: Frequent credit card applications within a short period can make you appear credit-hungry, raising concerns about your financial stability.
  5. Prior defaults on loans: Previous loan defaults or missed payments on credit accounts may negatively impact your creditworthiness and result in a credit card rejection.

Follow 5 steps for a credit card re-application

  1. Check your credit report: Get a copy of your credit report and review it for any errors or discrepancies. Dispute and rectify any inaccuracies that could be affecting your credit score.
  2. Improve your credit score: If your credit score is the reason for rejection, focus on improving it. Make timely payments on existing loans and credit cards, keep credit card balances low, and avoid applying for new credit unnecessarily.
  3. Understand the lender's criteria: Different lenders have varying approval criteria. Research and apply to lenders whose requirements align with your financial profile to improve your chances of approval.
  4. Address debt-to-income ratio: Reduce your debt burden by paying off existing debts. A lower debt-to-income ratio can enhance your creditworthiness and increase the likelihood of approval.
  5. Wait for a suitable period: Avoid reapplying immediately after a rejection. Give yourself some time to improve your credit profile and financial situation before applying again.


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Frequently asked questions

If my credit card application is rejected because I don't have a credit history, how can I fix it?

Consider applying for a secured credit card to build a credit history if your credit card application is rejected.

What do I do if my credit card application has been rejected on the basis of unstable income?

Focus on improving your income stability and consider applying for a credit card that aligns with your current income level.

Will my application get rejected if I have loans with many lenders?

Having multiple loans with various lenders can raise concerns about your debt management. It is essential to demonstrate a strong repayment history to improve your chances of approval.

How do I fix the problem of my credit card application being rejected because of prior defaults on loans?

Address any outstanding defaults by settling the payments and establishing a positive credit history with timely payments.

What do I do if my credit card application was rejected because I have too many credit cards?

Consider closing unused credit card accounts and reduce your overall credit card balances to improve your creditworthiness.

What can I do if my credit card application is rejected because of an unstable employment history?

Improve your employment stability by holding a steady job for a longer duration before reapplying for a credit card.

What is an adverse action letter?

An adverse action letter is a communication from the lender explaining the reasons for credit card rejection and your rights to obtain a free credit report.

Why does credit card get rejected?

Credit card applications may get rejected due to reasons such as low credit score, unstable income, high debt-to-income ratio, prior loan defaults, or multiple credit applications.

Can we apply for credit card after rejection?

Yes, you can reapply for a credit card after rejection. However, it is advisable to take steps to address the reasons for rejection before reapplying to improve your chances of approval.

How soon after applying for a credit card can I reapply?

If your credit card application is rejected, it is advisable to wait for at least six months before reapplying. Reapplying too soon may lead to multiple inquiries on your credit report and further damage to your credit score.

When should I reapply for a credit card after a credit card rejection?

You should check your credit report and credit score before reapplying for a credit card. If there were any errors or inaccuracies in your credit report, you should try and fix them before reapplying. Additionally, you should also improve your credit score by paying bills on time and reducing your debt-to-income ratio.

Can I apply twice for a credit card?

You can apply for a credit card as many times as you want, but multiple applications may hurt your credit score and reduce your chances of approval. It is more advisable to wait and work on improving your credit score before reapplying.

Can I reapply for a credit card if I get denied?

Yes, you can reapply for the same credit card or a different one if your application is denied. However, it is essential to understand the reasons why your application was denied and work towards fixing them before reapplying. It is also advisable to wait for at least six months to increase your chances of approval.

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