Credit cards revolutionised the lending processes worldwide, and in India, they are widely used for cashless transactions. However, though credit card approval regulations seem pretty straightforward, you must expect applications to take time to be authorised.
While borrowing money using a credit card, you must ensure to pay back the outstanding amount within the stipulated period. Often, due to some past instances, financial institutions may temporarily reject your request for the issuance of a credit card. Here, we will cover the most common reasons behind such decisions.
5 Most Important Reasons that May Lead to the Rejection of a Credit Card Request
Through the years, lending institutions have been attempting to fortify the credit card eligibility criteria to ensure less number of defaulters. Thus when you know these common reasons behind application rejection, you can take the necessary steps for unquestionable approval the next time.
1. Lender Does Not Get Enough Credit Information
If your credit history is limited, many lending institutions like the SBI can temporarily reject your credit card application. Therefore, you must build a healthy credit report before approaching these financing organisations.
However, not having a lengthy credit report does not make you count among the casual consumers who often skip their due payments on time. Nevertheless, we suggest you indulge in occasional credit transactions if you wish to strike off this concern. You can easily set up a stable credit repayment track record by repaying your utility expenses on time.
2. Your Income Does Not Fall Under the Eligibility Criteria
This concern can arise if you request a more premium card. Many lenders establish reasonable annual income criteria as they offer higher credit limits. Hence, we advise you to check the conditions before placing a claim.
Lenders demand accurate income proof from interested candidates and are assured of their repayment capacity. Therefore, to reduce the chances of rejection, please ascertain the issued Form 16, your previous salary slips or IT returns align with the lender-specific requirements.
3. You Have Too Many Credit Cards Already
A bank or NBFC may turn down your credit card application when they notice you already own several credit cards. Generally, lenders favour credit seekers who consistently maintain a low debt-to-income ratio.
The reason behind this inclination is multiple credit card possession indicates too much income outflow, putting the applicant’s creditworthiness under question. Therefore, switch lenders sparingly or spend using various credit cards simultaneously.
4. Your Credit Score is Low
Stay assured that while scrutinising a credit card application, any reputed financial institution will look into your credit score first. For instance, when you request an SBI credit card, the authorities expect your CIBIL score to be at least 750.
The reason why this factor is considered to be a prime determinant is that it confirms that a person is capable of sound debt management. Thus, before approaching a lender, ensure your credit score has not dipped below 700 at that time.
5. You Have Provided the Wrong Information Mistakenly While Applying
No matter how insignificant this issue may seem, it has a strong potential to nullify your credit card application. Error posting generally happens due to an excessively easygoing mindset while filling out the form. Also, you may skip any mandatory field, which will lead to the same consequence.
Finally, we advise the readers not to reapply immediately if they have faced a credit card rejection. Ideally, you must leave a minimum of 6 months gap between two consecutive applications. Allowing this window helps you maintain a flawless credit report. In addition, you get sufficient time to build on the missed criteria which previously caused an application to be turned down.
How can SBI Credit Cards be Beneficial for You?
Though the eligibility criteria demand a significant annual income and high credit score, SBI credit cards are highly praised. The reason is they offer a host of benefits like:
- It helps You Reduce Payable Interest
SBI credit cards come with a desirable balance transfer feature. For example, SBI offers loans at low interest, so you may shift your outstanding balance from other cards to an SBI credit card, reducing the outstanding balance.
- Facilitates Auto Bill Payment
The in-built ‘Easy Bill Pay’ option of the SBI’s mobile application lets you automatically settle the monthly utility expenses and recurring invoices once you provide the recipient’s particulars. This feature considerably cuts out the tension of meeting timely payments each month.
- Provides You with Cash Facility
When you execute credit purchases using an SBI card, you are eligible for the SBI Encash feature. It allows you to convert your credit limit into hard cash.
Whenever you run into an emergency, you can transfer the approved limit to your bank account within two banking days. Moreover, you can extend the repayment window for up to 36 months which assists you in maintaining other aspects of your budget.
How to Apply for an SBI Credit Card?
You can follow these steps to complete the card application process online without facing any hassle:
Step 1: Visit the official website of SBI.
Step 2: Navigate to the credit card section and click on the ‘Apply Now’ button.
Step 3: Provide all the requested details, like your employment status, phone number, and age proof.
Step 4: Select ‘Check Your Offer’ to know your eligibility.
Step 5: Upload the necessary documentation to complete the application process. In this last step, compare the various SBI credit cards and select one which you expect will best suit your needs.
Credit card requests usually face rejection due to the reasons discussed above. Recently, as the default rate has increased, financial institutions have established stricter eligibility criteria for credit card applicants. To ensure undisputed creditworthiness, refrain from applying for multiple cards and try maintaining an overall low credit utilisation.
