Why Am I Not Being Approved For A Credit Card?

Lamine Zarrad
March 14, 2022
3 mins

Credit cards can be a useful way to build credit, pay for things you need, and access exciting cardholder perks. Unfortunately, credit card companies reject new applications every day – and it’s not always clear why. 

If you’ve found yourself asking - why am I not being approved for a credit card? - read on for a few common credit denial reasons. 

9 common reasons you can be denied a credit card

1. You have a “thin” credit file

Credit card issuers check your credit report to determine your creditworthiness. If you have a short or non-existent credit history, you may be denied for having a “thin credit file.” There simply isn’t enough information to prove you’re a responsible borrower. 

If you have a thin credit file, you have a few options: you can get a co-signer; open a secured credit card (which requires an up-front deposit); or use apps like StellarFi to build credit with your monthly bills. 

2. Your credit balances are too high 

Credit card companies make money by charging interest, but they still prefer you keep your balance low. That’s because maxing out your cards suggests you don’t have the most stable finances. 

If you’re not being approved for a credit card, check your debt-to-credit ratio. Keeping yours below 30% is better for your approval odds – and your credit score. 

3. You have too much debt

The more debt you carry, the less room you have in your budget for another monthly payment. That’s why high debt levels can make lenders hesitant to approve your credit application. Pay down your overall loan balance to boost the odds on your next application. 

4. You have recent missed or late payments

Credit card issuers want to see a long history of on-time payments. If you’ve got a few negative marks from several years ago, you might still get approved. But recent missed and late payments suggest your current credit habits are less than desirable. Get and stay current on all your accounts, and these negative factors will have less influence over time.

5. Your income is too low

Income requirements vary from card to card, and issuers don’t usually share this information with the public. If you have low or no income, it may be why you’re not being approved for a credit card. 

6. You’ve had several recent credit inquiries

Applying for too many lines of credit in a short period of time can ding your credit and make card issuers less likely to approve your application. There’s no hard and fast rule, but it’s best to minimize your applications and only go after cards you really want.  

7. You have charge-offs or collections 

Recent collections, charge-offs, and negative public records make credit card companies less likely to approve your application – especially if the debt is tied to credit card use. If you have recent negative marks, settle up and work to get them removed from your report. 

8. You’re not old enough 

With few exceptions, credit card companies will not extend credit to borrowers under the age of 21. If you’re young, consider becoming an authorized user on your parent’s account or build credit using Stellar

9. You have an unstable work history

Credit card companies consider job stability an indicator of your ability to pay your debts. Job-hopping or going for periods of time without a paycheck can make it harder to get approved – especially if you have a weak credit history. 

Does getting denied for a credit card hurt your score?

Getting denied a credit card doesn’t hurt your credit score. However, lenders review your credit report when you apply. These inquiries can cause your score to dip in the short term, regardless of whether or not you were approved. 

Can you get denied for a secured card?

While you’re much more likely to be approved for a secured card, you may be denied if: you’re low- or no-income; you can’t cover the security deposit; you have extremely poor credit; or you’ve recently filed bankruptcy.

Read more: Secured vs. Unsecured Credit Cards

Can I apply for another credit card after being denied?

If you’re not being approved for a credit card, it’s generally recommended to wait around six months before reapplying. That’s because your score takes a hit from hard inquiries, and can take a bit of time to recover. In the meantime, use apps like Stellar to build credit and improve your approval odds.

Don’t settle for less than stellar credit

You’re more likely to be approved for a credit card with a strong credit history. StellarFi impacts factors that make up 100% of your credit score – including on-time payments, credit use, and credit age.

Best of all, you can build your credit using bills you pay already. 

Signing up is easy. The more bills you link, the more impact you’ll have on your score. Ready to check it out?

The StellarFi blog is intended to serve as an informational resource. While StellarFi can help you build your credit, we do not provide financial, legal, or accounting advice. Please consult a trusted advisor for financial, legal, or accounting guidance as needed.

5 Strategies to Build Credit Fast

What can you do to build credit quickly? There are several strategies and tools you can use to establish new credit, or improve your credit score. Take a look at the top 5 ways to build credit fast.
Building Credit
3 minute read

How Young People Can Build Credit

When it comes to building credit, the best time to start is now! Here's how young people can build credit, what to do if you have NO credit, why it's important to build your credit, and more.

6 Mistakes People Make When Paying Down Debt

Paying down debt is a great way to boost your credit score and reduce costly interest payments. Try to avoid these common errors to make the process easier and faster.

How to Build Credit Fast (Even if You Have None)

Learning how to build credit fast can be confusing and overwhelming. Check out our helpful guide complete with explanations, tips, and tools to help you build credit, even if you have no credit score.

How Do Student Loans Affect Your Credit Score?

How do student loans affect your credit score? This resource takes a closer look at how student loans can help - or hurt - your credit history.

7 Consequences of Having a Low Credit Score

Meta: The consequences of having a low credit score are bigger than you may think. Here are seven ways a spotty history can cause friction in your daily life.

Why Am I Not Being Approved For A Credit Card?

Why am I not being approved for a credit card? If you’ve found yourself asking this question, one of these nine common credit denial reasons may be to blame.

How Long Does it Take to Build Credit from Nothing?

Are you one of the 16% of Americans without a credit score? Here's how long it usually takes to establish your credit, plus some tips to speed up the process.

What is the Lowest Credit Score You Can Have?

Many know that the highest credit you can earn is 850. But what is the LOWEST credit score you can have? This one might surprise you! Check it out.
Join our newsletter
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
By subscribing, you agree to our Privacy Policy and provide consent to receive updates.

On-time payment history can have a positive impact on your credit score. Nonpayment may negatively impact your credit score. StellarFinance, Inc. will report your on-time payments to Experian®, Equifax® and TransUnion®. Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.