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Fun fact: I’ve been denied for two credit cards in my life — one from Citi and one from American Express. The funny thing is my credit score is in the 820s!
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At first, I was confused (and in denial), because I’ve spent years building an awesome credit profile. But as I dug deeper into the reasons, I learned that credit card issuers look way beyond your credit score for approvals.
Here are three factors behind the scenes that can trip you up.
1. A negative past banking relationship can haunt you
This is why I think Citi denied my application.
Over the years, I’ve opened a lot of credit cards and bank accounts. Sometimes it’s been for product reviews and trying the bank out (it’s my job). Other times, I’ve chased welcome offers to earn extra rewards. Either way, banks keep track of these interactions, and I probably ticked off Citi somehow.
If you’ve ever closed an account shortly after opening, or switched products too frequently, some issuers might view it as risky behavior. It might even be suspected as fraud (even if it’s not).
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This doesn’t mean you’ve done anything “wrong” — but banks are allowed to deny applications based on your past banking relationship, not just your credit report.
Pro tip: If you’ve been denied by a bank, it might help to wait six to 12 months before trying again. Use that time to establish a stronger relationship with them — like maintaining a checking account or other product.
2. Insufficient proof of income can get your application rejected
Even with a high credit score, issuers need to verify that you can handle more credit. If your income sources aren’t clear or you can’t provide documentation when asked, it can raise a red flag.
When American Express denied me, this was the issue. During the application, I listed both my income and my wife’s. She’s a teacher, and it was during school holidays, so we didn’t have immediate access to her most recent pay stubs — which American Express asked for.
This was totally my fault — I should have waited until I had all the necessary documents to apply.
Income verification isn’t just about the amount you make; it’s about consistency and clarity. If the issuer can’t confidently assess your financial situation, they might deny the application as a precaution.
3. Identity mix-ups and credit report errors are more common than you think
Here’s a crazy stat… Nearly 1 in 5 consumers have an error on at least one of their credit reports, according to the FTC.
Sometimes, these errors are harmless. But other times, they can cause major headaches. Like being mistaken for someone else with a poor credit history. If a credit bureau merges your identity with another person’s (it happens more than you’d expect), it can lead to inaccurate account listings or delinquencies showing up on your report.
Even if your score is in the 800s, an issuer might see a suspicious account or unresolved debt that doesn’t belong to you. That might be enough to trigger a denial.
It’s worth reviewing your credit reports at least once a year to make sure everything listed actually belongs to you. You can get a free copy of your reports from all three bureaus (Experian, Equifax, TransUnion) at AnnualCreditReport.com.
What to do if you’re denied a credit card
I’ll be honest, my feelings were hurt when I got rejected. Especially because I thought my financial record was bulletproof. But after a few days of sulking and a long walk on the beach, I moved on. It’s not that big of a deal.
Getting denied doesn’t mean you’re financially doomed. It usually means something in your application didn’t align with the issuer’s current criteria. Big whoop. There are other issuers that would love to have your business.
Here’s what you can do next:
- Request a reconsideration. Call the bank’s reconsideration line, which is usually listed on the letter they send with the reason for denial.. Sometimes a quick chat can clear up misunderstandings.
- Check your credit reports. Make sure there are no errors or weird looking accounts on there.
- Apply again when your situation changes. If you applied for several cards recently, it’s usually best to wait a few months before trying again. The 5/24 rule is a good guide. Don’t apply for more than five credit cards within a 24 month period.
- Look at other issuers. Just because one bank said “no” doesn’t mean others will.
Since my rejections, I’ve been approved for multiple new cards from different issuers. Life goes on. Don’t take it personally.
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Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.American Express is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
