{"id":17725,"date":"2018-08-21T11:24:47","date_gmt":"2018-08-21T03:24:47","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=17725"},"modified":"2021-12-24T17:16:13","modified_gmt":"2021-12-24T09:16:13","slug":"rejected-get-your-next-credit-card-application-approved","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/rejected-get-your-next-credit-card-application-approved","title":{"rendered":"Rejected? Get Your Next Credit Card Application Approved!"},"content":{"rendered":"

Rejection hurts. It is never easy, even when it is something as emotion-less as a credit card application. But it happens, and you will no doubt feel bummed about it.<\/p>\n

If your application was rejected, don\u2019t give up! Find out why you were rejected, fix the problem and, eventually, you WILL get the plastic you desire.<\/p>\n

Here are three steps to getting your next credit card application approved!<\/p>\n

<\/span>Step 1: Find out why<\/strong><\/span><\/h2>\n

Receiving a rejection letter from the bank when you are expecting the credit card that you applied for can be crushing.<\/p>\n

But before you burn the letter, try and find out what the reason for the rejection was first. Go through the letter to see if a reason is stated. The thing with bank applications are \u00a0you may not be told the reason why you are rejected.<\/p>\n

You can call the bank to find out more details on the reason you were turned down. Usually, banks won\u2019t tell you up front so you\u2019ll need to call them to find out.<\/p>\n

Here are some common reasons that can result in you being denied a credit card:<\/p>\n\n\n\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Insufficient information or missing required documents<\/strong>
\n
\nIn most cases, you are required to submit the latest EPF statement and your NRIC with your application. Sometimes, more supporting documents were needed and your application could be rejected if you don\u2019t get those to them in time. Call to find out.<\/td>\n<\/tr>\n
There\u2019s an issue with your credit report<\/strong>
\n
\nFrequent late payments for your other cards or loans will drag your credit score down. Check your iMoney CreditScore to find out if you have any signs of being a poor paymaster.<\/td>\n<\/tr>\n
High debt-to-income ratio<\/strong>
\n
\nYour debt-to-income ratio measures how much you spend on debt payments per month, against your monthly income. The recommended healthy ratio is below 30%. Anything higher will hurt your credit.<\/td>\n<\/tr>\n
Your income is not stable<\/strong>
\n
\nBanks always want to see a stable, predictable source of income from their customers. If you\u2019ve just joined the workforce, or have been unemployed for a while, it\u2019s good to wait for at least 6 months at your new job so you can show them this consistency before applying for a card.<\/td>\n<\/tr>\n
Your income is too low<\/strong>
\n
\nEnsure that you are applying for cards that you can meet the minimum income requirement. TO be able to qualify for a card, your income must be at least RM2,000 a month.<\/td>\n<\/tr>\n
You own too many credit cards<\/strong>
\n\u00a0
\nIf you are earning below RM36,000, you will not be able to own credit cards from more than two issuers. You can cancel on card first, then apply for another.<\/td>\n<\/tr>\n
You applied for too many credit cards in a short period of time<\/strong>
\n
\nYou may think you are bound to get one card approved when you applied for a dozen, but this can make you seem less creditworthy. If you are rejected, wait for a few months before applying again.
\n
\nRemember, if your application is rejected from one bank, another bank looking at your credit report will see that and will also be less likely to approve you.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

By knowing the usual factors banks look at when approving credit card application, you may be able to rectify it for your next application!<\/p>\n

<\/span>2. Clean up your credit report<\/strong><\/span><\/h2>\n

Of all the reasons for being denied your credit card application, a problematic credit report is the most important and difficult to rectify. It will also take a longer time to rectify.<\/p>\n

In Malaysia, your credit report is stored in the Central Credit Reference Information System (CCRIS). The CCRIS is managed by the Credit Bureau under the central bank. It records \u00a0all your loans and credit information of the past 12 months. This report is made available to the individual, and also all the financial institutions in the country.<\/p>\n

In the report, you will be able to see your outstanding credit (such as home loan, hire purchase, credit card, personal loan and overdraft), special attention accounts (such as Non-Performing Loan, or under special debt management programme, like those by AKPK), and applications of credit or loan.<\/p>\n

Under each section, information such as outstanding amount and payment behaviour are included, so financial institutions will be able to gauge if you are a good paymaster, and also determine your debt-service-ratio (DSR), which will be explained in the next point.<\/p>\n

These steps include:<\/p>\n

\"how<\/a><\/p>\n

If you are disciplined in keeping all of the above three steps for six to 12 months, your credit score will likely improve. If you keep regular tabs on your credit score, you can easily know when you are ready to reapply for the card you couldn\u2019t get before.<\/p>\n

On the off chance that there is a mistake on your credit report, you can dispute it and have it corrected.<\/p>\n

<\/span>3. Lower your debt-to-income ratio<\/strong><\/span><\/h2>\n

Many lenders use debt-to-income, also known as, debt-service ratio (DSR) to measure how much of your income is spent on debt payments every month. They use this as a gauge of your ability to service future debt should they issue a card to you. This ratio is expressed as a percentage, and the lower the percentage is, the better.<\/p>\n

For example, Amy earns RM4,500 a month, and she has a combined debt payment of RM2,000 every month, which includes a credit card, a car loan and a personal loan. Her DSR is RM2,000 divided by RM4,500, which comes up to 44%.<\/p>\n

That\u2019s less than ideal, and any new credit application by Amy, including a credit card, may be rejected due to the high DSR.<\/p>\n

Taking on too many debts relative to your income can have serious consequences. With your debt increasing, your credit score will slide downward, and that makes it harder to get other loans.<\/p>\n

If DSR is the reason why you are denied a new card application, here are a few steps you can take to rectify that:<\/p>\n