7 reasons your credit card gets rejected even with a good credit score

Banks usually consider a good credit score as one of the eligibility criteria for approving or rejecting credit card applications. However, just having a good credit score doesn’t guarantee that your credit card application will be approved. Apart from having a good credit score, you need to fulfil the other eligibility criteria for your credit card application to be approved.

In this article, we will look at some of the reasons why a credit card application can be rejected inspite of having a good credit score.

Reasons for credit card application rejection inspite of a good credit score

Did your recent credit card application get rejected inspite of having a good credit score? Here are some reasons why that may have happened.

Bank sources applications from a limited number of cities

Some banks source applications from a limited number of cities. If you are staying in a city other than those listed and apply for a credit card, the application will be rejected. For example, the American Express eligibility criteria mention that the cards are currently issued to residents of specific cities. These include Delhi/NCR, Mumbai, Bangalore, Chennai, Pune, Hyderabad, Jaipur, Kolkata, Indore, Coimbatore, Chandigarh, Ahmedabad, Surat, Vadodara, Bhopal, Bhubaneswar, Ernakulam, Vijayawada, Lucknow, Ludhiana, Nagpur, Nashik, Thiruvananthapuram, Mysuru, Cuttack, and Visakhapatnam.

So, if you are staying in any other city other than those mentioned above and apply for an American Express credit card, your application will be rejected. Similarly, HSBC also issues credit cards to individuals residing in specific cities only.

Employment criteria not met

To be eligible for a credit card, you must fulfil the employment criteria. Most banks issue credit cards to salaried and self-employed individuals. However, the HSBC website mentions the eligibility criteria for some credit cards as applicable only for salaried individuals.

For example, the HSBC website mentions the salary eligibility criteria as Rs. 6 lakhs per annum for the TravelOne, Visa Platinum, RuPay Platinum, RuPay Cashback, and Live+ credit cards. There is no income eligibility criterion mentioned for self-employed individuals for the credit cards mentioned above. So, if you are self-employed and apply for any of these credit cards, your application may get rejected.

Bank has a one credit card per individual policy

Some banks have a policy of issuing one credit card per individual. They may issue one core credit card and one co-branded credit card per individual. However, there may be exceptions to the policy, and after taking approval from the relevant authorities, the bank may issue additional credit card(s) to an individual.

For example, Yes Bank usually issues one credit card per individual. For example, the Yes Bank Build Your Own Card (BYOC) eligibility criteria mention: “If you are already holding any YES BANK Credit Card, you are not eligible for this card.”

Similarly, the Yes Bank FinBooster Credit Card eligibility criteria mention: “Existing YES BANK Credit Cardholders are not eligible for this card.”

So, if you already hold a Yes Bank credit card and apply for any of the above two cards, your application will be rejected.

Income eligibility criteria not met

Most credit cards require a specific minimum income, as stated in the card eligibility criteria. If your income is lower than the minimum income eligibility criteria for a particular card and you apply for that card, your application will be rejected.

Within a bank, different credit cards have varying minimum income eligibility criteria, depending on the card features and benefits, the bank’s positioning of the card, and the segment of customers it is targeting. For a particular credit card, the bank may specify different income eligibility criteria for salaried and self-employed individuals.

For example, the HDFC Bank Regalia Gold Credit Card has different income eligibility criteria for Government employees, non-Government employees, and self-employed individuals. It is more than Rs. 1 lakh net monthly income for Government employees, Rs. 1.5 lakhs net monthly income for non-Government employees, and Rs. 18 lakhs Income Tax Return (ITR) for self-employed individuals.

The income eligibility criteria for the HDFC Bank Diners Club Black Metal Credit Card is a net monthly salary of more than Rs. 2.5 lakhs or ITR of more than Rs. 30 lakhs for self-employed individuals. The HDFC Bank Infinia Metal Credit Card is invite-only. Hence, the income eligibility criteria is not mentioned on the HDFC Bank website.

Before applying for an HDFC Bank credit card, check the minimum income eligibility criteria to avoid rejection due to not meeting the required income threshold.

Age criteria not met

Most banks specify the minimum and maximum age requirements for credit card eligibility. If your age is lower than the minimum age eligibility criteria or higher than the maximum age eligibility criteria, your application will be rejected.

For example, the Axis Bank website mentions 18 to 70 years as the age eligibility criteria for the Horizon Credit Card. Similarly, the ICICI Bank website mentions that the applicant’s age must be over 21 years for the Amazon Pay ICICI Bank Credit Card.

Before applying for any credit card, visit the respective bank website and check the age eligibility criteria.

Application error(s) or issue with KYC

When filing the application form, ensure that all the information being filled in is accurate. If there is any issue with personal information, contact details, income figures, or other relevant details, the bank will reject the application.

Sometimes, there can be an issue with the Know Your Customer (KYC) process. The copy of the KYC documents submitted may not meet the requirements, or the video KYC may not have been completed within the stipulated time. If the KYC process has not been completed, the bank will reject the credit card application.

Residential status

For most credit cards, one of the eligibility criteria is that the individual must be a resident of India. If you apply for such a credit card, and your status is Non-Resident Indian (NRI), the bank will reject your application.

Credit card application

When you apply for a credit card, a bank checks whether you fulfil all the eligibility criteria. Having a good credit score is only one of the eligibility criteria. The other eligibility criteria include city of residence, employment status, minimum income, age, and residential status, among others.

In addition to fulfilling these criteria, the KYC process must be completed successfully within the specified time period. Once all these steps and the credit underwriting process are completed, only then will the bank provide a decision on whether the credit card application has been approved.

Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached on LinkedIn.

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