Bank Notes

Have you ever been rejected for a credit card and you aren’t sure why? There are a number of reasons why you might not be getting approved. Let’s help you break them down.

1. You already owe money.

If you already have outstanding loans, lines of credit or credit cards, it can be harder to get new ones.

2. You’ve been shopping around for credit.

If you have been applying for credit in different places recently like getting a car loan, a store credit card, another line of credit, etc., it is known as 'credit seeking behaviour.' This can be a potential concern for a lender as they’ll be wondering why you have been focused on getting access to new credit. Lenders may see it as a sign you’re have money problems or that you are maybe about to take on too much debt.

3. You don’t meet the requirements of the credit card you are applying for.

Some cards have requirements like a certain minimum income level. You could have a great credit score but if your income level is below the requirements, you likely won’t get the card. Make sure to read through the requirements of the card before you apply.

4. You have an unstable employment history.

If you are new to the work force, have a history of frequently changing jobs or are recently self-employed, your odds of getting approved could be lower.

5. You don’t have a lot of experience borrowing money.

If you haven’t used credit much before, like if you are new to the country or young, it can be harder to qualify for credit. It can be challenging since you need to have credit in order to show you can handle it properly. Lenders might be more likely to approve you for a credit card with a lower limit (this will also help you build a solid credit score).

Having a good credit score can usually help if you are applying for credit. If you aren’t happy with your credit score, here are a couple ways you can try to improve it.

1. Create a monthly budget: list out your monthly expenses and income to see where your biggest expenses are coming from. For your credit cards, make sure you make at least your minimum payment each month on time.

2. Be punctual: set reminders to help you make sure you pay your bills on time. Consistently late payments can have a negative impact on your score.

Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.