Credit cards are one of the most widely used financial tools not just in the UAE but across the globe. With improving technology and digitization, more and more people are inclining towards digital payment methods. Every day the number of people applying for credit cards in the UAE increases, and several applications are denied due to a plethora of reasons why their credit card application is rejected.
Now in such a situation, it has been observed that applicants are muddled and are unable to decide what should be their next move. To clear all your doubts and queries, we have come up with a new blog where we will shed light on six things you can do when your credit card application is denied.
Hold on, before you Reapply
A common practice amongst many applicants is applying for multiple cards at the same time, which ideally is not the wisest thing to do. Based on the general rule of thumb and real-time scenarios, the number of applications by a single applicant higher will be the chances of getting rejected by the financial institution.
This is mainly because multiple applications create an impression of desperation, which often results in rejection. The best way to avoid getting rejected over and over again is to take a small break before you reapply for a new card. This not only will prevent your credit score from being wrecked but will also increase the probability of getting your application accepted.
Read the Provider’s Response Carefully
A credit card provider typically has a period of 30 days to reply to your application. However, in most cases, the providers reply within a week. The credit card provider will issue a letter that will formally mention the reason behind your application’s rejection. There are numerous reasons your credit card application might be rejected, be it credit score, outstanding financial obligations, or payment history.
Make sure when you receive the letter from the credit card provider, you read it carefully to identify the reason behind the rejection of your application. This will help you to avoid mistakes next time so that your credit card application gets accepted.
Review your Credit Score
One of the most common reasons behind the rejection of the credit card application is the credit score. As per the new guidelines, banks and financial institutions are supposed to send a copy of your credit report with the credit score if the rejection is due to your credit score. Typically, the provider’s credit report encompasses the various factors that have led to an unsatisfactory credit score.
Reviewing your credit report carefully will help you get a clearer understanding of the reasons that led to your application’s rejection. This will allow you to avoid the issues in the subsequent applications.
Build your Credit Score
As mentioned earlier, one of the most common reasons behind the rejection of credit card applications not just in the UAE but across the globe is the credit score. Once you’ve reviewed your credit score and discovered that your application was rejected due to your credit report, you need to rebuild it. Some of the most common reasons that might have led to a wrecked credit score are outstanding financial obligations, untimely repayments, high credit card balances, etc.
The best part about this is that once you receive the credit card rejection letter along with the credit score, you can use it as the starting point to fix your credit score. You can improve your disturbed credit score by paying outstanding financial obligations, making timely payments, paying out on high balances, and reducing the number of new applications.
Use a Retail Credit Card
Retail credit cards are easier to get compared to normal cards and can be used as a tool to mend your credit score. Typically, in most cases, when you apply for a retail credit card and get approved, one usually begins with a low credit score. Once you start using your retail credit card, you can use it to fix your credit score by simply making timely payments and avoiding high balances.
An important point to be kept in consideration is that store cards are offered at higher interest rates. Therefore, one needs to be careful about carrying a balance. Try and make your payments in full, as you might end up paying heavy rates in the form of interest.
Get a Secured Credit Card
Probably the simplest thing you can do if your credit card application is rejected is getting a secured credit card. Unlike conventional credit cards, these cards are issued by the financial institution after the applicant has deposited a security amount as collateral. The best part about secured credit cards is that one does not need to have a decent credit score to get approval. All you need to do is deposit the security amount, followed by submitting the form and documents, and your application is accepted.
In a Nutshell
With these six things to do when your credit card application is rejected, you can hop on and apply for your perfect financial companion.
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