Author Topic: Got rejected for a credit card  (Read 2784 times)

catlady

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Got rejected for a credit card
« on: August 13, 2020, 02:27:12 PM »
Hey all,

So I am brand new in the MMM lifestyle and also with being proper adult, so please don't judge hard :/ . So now to my problem. I applied to a credit card today with my bank and got instantly rejected... I called back to ask why and the lady told me no reason was specified. She asked if I want to start the application again but they have to redo the whole background check. I have never been in that type of situation and I have no idea how to proceed.
  • Wait for several months and try again.
  • We will be finished paying off our car next week. Wait for that and try again?
I will not be using the same bank for various reasons, so I will be applying to another bank. I have no credit cards on my name currently because I am weird and closed mine (currently using my husband's). So just to precise we have never been late on a payment, I am employed and so is my husband. We have a mortgage and a car loan (both with another financial institutions. )

Thanks
« Last Edit: August 13, 2020, 02:31:10 PM by catlady »

terran

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Re: Got rejected for a credit card
« Reply #1 on: August 13, 2020, 02:35:01 PM »
Have you ever had a credit card before? Have you ever had any other kind of loan?

catlady

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Re: Got rejected for a credit card
« Reply #2 on: August 13, 2020, 02:39:55 PM »
Yes I had a credit card that I canceled (I am a bit ashamed of the reason) but it had no withstanding balance. Everything was payed right away. My SO and I have a joint mortgage and a car loan. No other debt, no late payments.

HPstache

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Re: Got rejected for a credit card
« Reply #3 on: August 13, 2020, 02:45:13 PM »
What is your credit score?  Have you checked that recently?  It would be good to know a number and at the same time make sure there is no fraud happening that could affect your eligibility for a credit card.  If you have a low score, Google best cards for low credit score.  Get a card, pay on time, build credit.

catlady

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Re: Got rejected for a credit card
« Reply #4 on: August 13, 2020, 02:49:58 PM »
What is your credit score?  Have you checked that recently?  It would be good to know a number and at the same time make sure there is no fraud happening that could affect your eligibility for a credit card.  If you have a low score, Google best cards for low credit score.  Get a card, pay on time, build credit.

My credit score is 763. So not that bad. I just don't know if I should apply for a new card now, wait for the car to be payed off or wait several months. We were never late to pay anything.

Steeze

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Re: Got rejected for a credit card
« Reply #5 on: August 13, 2020, 03:05:53 PM »
Credit score is good. Seems like you should be approved - no reason to wait from what I can tell. Find a card that is worth having for a long long time (miles/points/cash back) and don't close it ever. Doesn't need to be through your bank.

Same thing happened to me before - I applied for an Amex and got denied and I have ~800 credit score with a long and perfect credit history. No explanation, their loss. Ended up getting a cash back card through TD Bank instead. Its not the best card rewards-wise, but is convenient for me since I have accounts with TD.

Will lower your credit score temporarily (a few points), but unless you are about to refinance your mortgage or something it shouldn't be a big deal.

Edit: I also had a CC account closed, my oldest and best account, due to inactivity. They called me and sent me letters to notify me, but I never updated my contact info so they never actually reached me. I called after it showed up on my credit report as closed and there was nothing they could do.
« Last Edit: August 13, 2020, 03:08:01 PM by Steeze »

mozar

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Re: Got rejected for a credit card
« Reply #6 on: August 13, 2020, 03:09:24 PM »
If that happens again you can get a joint card with your husband and then have his name removed.

catlady

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Re: Got rejected for a credit card
« Reply #7 on: August 13, 2020, 03:16:35 PM »
Our mortgage will be up to renew in 3y so I am not too much concerned. The only thing that bothers me is that no reason was provided and the lady from the call center was super surprised. I will apply to another bank because mine is starting to piss me off lol.

Thank you for the advice. It was really helpful ^^

Steeze

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Re: Got rejected for a credit card
« Reply #8 on: August 13, 2020, 03:22:23 PM »
Also - sites like Credit Karma will look at your credit report (has no effect on your credit score) and will recommend cards to you and show you how likely you are to get approved based on data from other applicants that were recently approved.

catlady

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Re: Got rejected for a credit card
« Reply #9 on: August 13, 2020, 03:34:15 PM »
I apologize if my question is stupid but what is the alternative site for Canada. I am a mostly recent immigrant so I am still a bit lost.

ETA: I have a button in my online banking where I can click to check my credit score. I suppose it's accurate?
« Last Edit: August 13, 2020, 03:43:33 PM by catlady »

plog

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Re: Got rejected for a credit card
« Reply #10 on: August 13, 2020, 03:47:32 PM »
Quote
I called back to ask why and the lady told me no reason was specified

In the US you must receive a written decline citing the reasons for the decline within 30 days.  That's not going to tell you the specific item, but will let you know the category; e.g.  Insufficient history, recent deliquency, length of time at employment, etc.  That letter should also notify you about how to get a free copy of your credit report on which the decision was based.

catlady

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Re: Got rejected for a credit card
« Reply #11 on: August 13, 2020, 03:54:01 PM »
Quote
I called back to ask why and the lady told me no reason was specified

In the US you must receive a written decline citing the reasons for the decline within 30 days.  That's not going to tell you the specific item, but will let you know the category; e.g.  Insufficient history, recent deliquency, length of time at employment, etc.  That letter should also notify you about how to get a free copy of your credit report on which the decision was based.

Hmmm it wasn't mentioned anywhere. I will call and ask. Thanks for that I had no idea this existed!

ETA: I'm in Canada but I suppose there should be something similar?

ETA2: I know I sound really weird and incompetent but to my defense I am a recent immigrant ( think 3y) and I am still getting the hang of everything.
« Last Edit: August 13, 2020, 04:02:45 PM by catlady »

Frankies Girl

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Re: Got rejected for a credit card
« Reply #12 on: August 13, 2020, 04:59:30 PM »

ETA: I'm in Canada but I suppose there should be something similar?

ETA2: I know I sound really weird and incompetent but to my defense I am a recent immigrant ( think 3y) and I am still getting the hang of everything.

You do not sound weird and incompetent. You're trying to learn/teach yourself, expand your abilities, take on new challenges and responsibilities, even working on financial stuff (that some adults NEVER even bother to get the hang of) and you are an immigrant in a new country?

You ask whatever questions you need to ask and hopefully you'll get tons of very friendly advice and help here.

And keep on learning and growing and being awesome. :)


ETA: if you only have ~3 years of time in your new country, they may have rejected you due to too little credit history. My best guess anyway.

catlady

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Re: Got rejected for a credit card
« Reply #13 on: August 13, 2020, 05:53:19 PM »
Thank you for the kind words ^^ It means a lot :)))). I am preparing a case study with our budget. We have always been mostly good with our spending, unfortunately sometimes the lusting after shiny things preveils. But we have never accumulated any unnecessary debt (besides a car and a house).

 I called my bank again and they confirmed that I should be getting a letter with more information. So I will wait for that before applying to any more places. I will update once I have it.

Thank you all for the help!

chemistk

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Re: Got rejected for a credit card
« Reply #14 on: August 14, 2020, 06:01:13 AM »
Maybe this isn't the case for you, but I was rejected from a CC earlier in the year for possibly the dumbest (on my part) reason.

I was flying (pre Covid) out to a friend's bachelor party and decided to sign up for the airline's CC to have the statement credit cover most of the cost of the flight. I was rejected, and you know the reason? I had spelled my last name wrong! I didn't find out why until a few weeks after I tried to sign up (and after I had already gone on the trip) - I felt so incredibly dumb and decided that never again would I fill out an application like that on my phone.


G-dog

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Re: Got rejected for a credit card
« Reply #15 on: August 14, 2020, 07:44:15 AM »
Yes I had a credit card that I canceled (I am a bit ashamed of the reason) but it had no withstanding balance. Everything was payed right away. My SO and I have a joint mortgage and a car loan. No other debt, no late payments.

How long ago was that?  Your credit history may not be current, and that could be an issue.  Are you added as a user on your husbandís CCs? If not, I suggest doing that to boost your record.

Greystache

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Re: Got rejected for a credit card
« Reply #16 on: August 14, 2020, 07:53:16 AM »
I have a credit score of right around 800 and I was rejected. The reason was lack of income and lack of history in my name.  A while back I read an article about women who have credit difficulties because all of their credit card accounts are in their husband's name. So I encouraged my wife to get an account in her name.  Her account had better rewards points than mine so we used her account all the time and I eventually closed mine. Then I retired and arranged my finances so that our AGI is pretty low, less than $50K per year. When I applied to get a credit card that offered a $500 bonus for signing up, I was rejected.  I had apply to another, less generous card to get accepted and build up my credit history. We still keep our AGI low and I think that will make us less attractive to some credit cards.
Also, it may not be you at all.  Banks and credit card companies are trying to limit their exposure during the pandemic. They are afraid of millions of unemployed people defaulting on their debts.  I have read that some card holders have had their credit limits reduced. In this risk climate, it may be that credit card companies are not looking to add new accounts.

Rosy

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Re: Got rejected for a credit card
« Reply #17 on: August 14, 2020, 10:49:27 AM »
@catlady - We can tell you are a bit thrown off by this experience but you can relax - it happens every day to all sorts of people for all sorts of different reasons.

If I were you the first thing I would do is:

1. Get a full credit report so you know exactly what information they have on you that is used by the bank to determine whether you are credit worthy - sometimes information is missing or inaccurate.
I don't know about Canada, but the US for instance has three credit bureaus that all banks use but they will generally only use one out of those three credit bureaus for information.

The important thing to know is that each bank and each credit bureau has different criteria - so one might approve/decline based on the same information.

2. Yes, your credit score is good - but they may well want five years with the same employer or you might be two points away from meeting some other criteria.
The important thing is that you always pay attention to the information in your file, update your information and make sure it is always correct. You can do that by sending them a certified letter with your updated information and documents if necessary - maybe even a chat and upload.

3. Banks are a business - it is nothing personal. They are choosing the people who will be a good credit risk for them based on their formulas.
Every credit card issuer has a "recon line" a phone number you can call and ask them to "reconsider" their decision based on new-better information.
Use it!
Be polite - ask your questions, ask to speak to a supervisor and if you feel it is still getting you nowhere - call again and speak to a different representative.

In my experience the standard letters they mail out are worthless. It is always worth a follow-up phone call to their recon line - the number will probably be in your letter.

4. In my opinion every grown woman needs a credit history of her own, it takes time to build up the limits on your card unless you have a very well paying job.
If you became a widow tomorrow (god forbid) this could potentially become a big problem because your husbands cards do not count as your own credit history. It happens all the time; even to 'old' people because "he" handled the money - not a road you want to take.

5. Yes on becoming an add-on user on all your husbands cards - this will boost your credit score in three to six months time.
 It is a helpful credit building tactic, but bottomline is that you need credit cards in your own name.

In general:
Having at least two different credit cards is important and can be a lifesaver.
Imagine you are overseas and there is an issue/fraud with your card just when you need it the most.
It is important to understand that if you have two cards you have an alternative.

Also, if you have two cards you automatically have a higher spending limit in an emergency - it is called being prepared, just in case:).

Always remember,
just because you have a card doesn't mean that the card issuer can't suddenly close your card or drastically reduce your credit card limit just when you need it the most.
Never close your card - if you don't use it for a long time they will close it without dinging your credit. If it was a high limit your credit might drop a few points but will bounce right back up shortly.

Forget about being pi$$ed off - this is business, you select a bank(s) and two credit cards that provide you with the benefits that are worthwhile to you. 
First order of business is to sort out why you were declined and stay calm while you evaluate your current bank.
« Last Edit: August 14, 2020, 10:51:07 AM by Rosy »

Rosy

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Re: Got rejected for a credit card
« Reply #18 on: August 14, 2020, 11:18:18 AM »
FWIW
Second-order of business is to learn a bit more about what cards and banks are out there and what goodies they offer that you benefit from without doing a thing - cash back-on what?-how much? - travel points - no charge for foreign exchange fees ...

My main credit card actually makes me money every year. I get 3% cash back on everything, $100 travel credit a year and other cool travel perks, free cell phone insurance and no fees on foreign exchange. My secondary card gives 5% back on all Amazon purchases with a few other perks that are worthwhile to me. I get between $400 to $700 back from each card every year - min of $1K for free, by paying attention and using their offers, perks and cash back points.
Considerations:
One is through a military Credit Union with plenty of worldwide branches and decades of experience of dealing with the types of issues that can arise while away from home. They really do make banking easy online and they have a brick and mortar branch nearby.
I wanted a card with low interest just in case I ever had trouble paying the bills or for a month or two only wanted to pay the minimum. Hasn't happened, but I'm happy to know that I'm not stuck paying an exorbant interest of 22% like on the Chase card I only opened for the bonus which came with an insultingly low limit.
I wanted a card that gave me a wide range of perks such as a good cash back % but also great travel perks.
Once I started banking there I realized they had great CDs and other products, so easy to deal with they have become my favorite bank.

Each card I own I researched diligently for every perk, we were paying $10 a month each for cell phone insurance - the card offered it for free, before other cards did so.
That alone is $240 savings a year.
Banks and credit cards change over time - so it is always worth doing at a minimum an annual review.

A special savings account that I opened @ 2%+ interest with payout in November suddenly changed to 0.45% interest. I didn't realize it for three months - during that time I would have had the opportunity to open a CD @2.25% instead. I didn't check sooner because I thought the rate was locked in since it was a special Holiday Club Account and not just a checking account, I was wrong.
Missed out - ugh.   
 
Remember times have changed in the past months - some banks are becoming stricter or changing their criteria. Just do your due diligence and take care of your own business.
We all live and learn.

My good friend has always liked a particular credit union which used to be great many years ago when I first joined them. She remained loyal to them and was intimidated by opening a new account and suspicious of why another bank would offer a bonus for opening an account with them.
It is a business I told her, you need to act in your own best interest. Alas...

Once I realized there were banks out there offering good interest rates, no fees and great perks - I moved my accounts.
It literally made a difference of several thousands of dollars over a five year period - amazing.

You don't need to get a credit card from only your own bank. There are dozens of credit cards that you can apply for online and even get a bonus of $100-$500 if you spend X within the first 60 to 90 days. If it makes sense, you can always open a bank account at the issuing bank later on - hopefully with another bonus for opening the bank account.
Many people do this just for the bonus (incl many mustachians). I don't know any helpful Canadian sites, but for the US doctorofcredit.com is a trustworthy, informative blog with a ton of good information.

A long time ago I used to be a bank mystery shopper pretending to want to open a new account.
Asking about their offers and perks I learned that oh yeah, there are differences between banks and oh yeah, if done right that pays off - every month.
It also made me realize that I have options and that quite a few financially literate people have more than one bank account.
It is not as unusual as I had assumed.
Each account suited to a particular want/need - it works:) - $$$.

Hope that helps in giving you a different perspective - good luck going forward!

ChpBstrd

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Re: Got rejected for a credit card
« Reply #19 on: August 14, 2020, 12:57:45 PM »
It could be as simple as the credit card company hit their new activations quota.

catlady

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Re: Got rejected for a credit card
« Reply #20 on: August 15, 2020, 10:18:14 AM »
Wooooow thanks for all the advice and pointers guys <3. So an update from me. I called my bank again and this time they passed me to the credit team and I got my explanation. The problem came from me not understading enought how the system works. When I filled my application, I filled only my income and then I also filled the mortgage amount and the car. So now it looks like I'm paying everything alone which will not qualify me for a credit card. Now I have another call with a branch advisor to review my application. Also I am really happy we will pay out our car next month and I swear I'd rather roll in the mud( wanted to say something else lol) than get another car with payment.

ETA: although even if u combine the 2 payments they make half of my income so it's a bit weird.
« Last Edit: August 15, 2020, 10:36:16 AM by catlady »

Catbert

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Re: Got rejected for a credit card
« Reply #21 on: August 15, 2020, 10:33:17 AM »
^^^  At least in the US you can state "family income" rather than individual income which fixes this problem. 
« Last Edit: August 15, 2020, 11:04:10 AM by Catbert »

NumberJohnny5

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Re: Got rejected for a credit card
« Reply #22 on: August 15, 2020, 10:58:12 AM »
First credit card, I was denied. While I only had a minimum wage job, I had no debt. Turns out, my dad's credit report had gotten merged with mine, and he had a LOT of debt. There were two solutions. #1, get the credit report fixed; or #2, get proof that I was currently enrolled in university. Obviously I did both, but it took a while to clear up the credit report. Seriously, the bank had "proof" that I was drowning in debt with absolutely no way out, but as long as I was a student, I was approved! That really should have been a red flag.

Anyway, to the OP or anyone in a similar situation, here's what I'd do:

If the debt is NOT in your name, then don't disclose it. I understand that maybe you have an agreement with your partner that you'll cover half of it. What the credit application is asking is what debts are you LEGALLY obligated to pay. They don't care about morally obligated.

If the debt is in both your names, then I would either list half of the amount (assuming you are only giving them information about your income) or the entire amount (assuming the application asks for household income). I don't know how it goes in Canada, but in the US I've seen applications ask for just the household income, or for your specific income and then any other household income.

If the debt is solely in your name, then you gotta disclose it. Hopefully there is a section where it asks for household income vs just your own.

As for waiting until the car is paid off, that's a good idea. Your application MAY be flagged if you say you have no car payment, yet a car loan shows up on your credit report. A manual review should clear this right up, though you could wait until it shows up on your report as paid off. Note that your credit score might drop a bit after it's paid off, in fact in the US it most definitely will over time (it looks not just at payment history, but payment history across multiple types of loans; my wife has absolutely zero late payments but is still stuck in the low 700s because she only has two credit cards; I talked her into getting a SMALL student loan just so there's an installment loan showing up on her history instead of just revolving).

catlady

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Re: Got rejected for a credit card
« Reply #23 on: August 15, 2020, 11:06:51 AM »
First credit card, I was denied. While I only had a minimum wage job, I had no debt. Turns out, my dad's credit report had gotten merged with mine, and he had a LOT of debt. There were two solutions. #1, get the credit report fixed; or #2, get proof that I was currently enrolled in university. Obviously I did both, but it took a while to clear up the credit report. Seriously, the bank had "proof" that I was drowning in debt with absolutely no way out, but as long as I was a student, I was approved! That really should have been a red flag.

Anyway, to the OP or anyone in a similar situation, here's what I'd do:

If the debt is NOT in your name, then don't disclose it. I understand that maybe you have an agreement with your partner that you'll cover half of it. What the credit application is asking is what debts are you LEGALLY obligated to pay. They don't care about morally obligated.

If the debt is in both your names, then I would either list half of the amount (assuming you are only giving them information about your income) or the entire amount (assuming the application asks for household income). I don't know how it goes in Canada, but in the US I've seen applications ask for just the household income, or for your specific income and then any other household income.

If the debt is solely in your name, then you gotta disclose it. Hopefully there is a section where it asks for household income vs just your own.

As for waiting until the car is paid off, that's a good idea. Your application MAY be flagged if you say you have no car payment, yet a car loan shows up on your credit report. A manual review should clear this right up, though you could wait until it shows up on your report as paid off. Note that your credit score might drop a bit after it's paid off, in fact in the US it most definitely will over time (it looks not just at payment history, but payment history across multiple types of loans; my wife has absolutely zero late payments but is still stuck in the low 700s because she only has two credit cards; I talked her into getting a SMALL student loan just so there's an installment loan showing up on her history instead of just revolving).

Thanks for the input ^^. The representative booked us a meeting with an advisor from our bank for reviewing the application. He will speak to both of us and get the whole picture of our income (we have to bring our T1 and T4 from our employers). Hopefully after the review it will all work out :) If it doesn't I will wait for the car to be cleared up (as you sugested)  and then try again with one of the new immigrants options.

catlady

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Re: Got rejected for a credit card
« Reply #24 on: August 29, 2020, 07:59:34 PM »
Small update. The advisor did not call me. So I am thinking of booking a new meeting or waiting for the car to clear from my credit report and try another bank

catlady

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Re: Got rejected for a credit card
« Reply #25 on: September 14, 2020, 07:59:10 PM »
Final update lol. Got another appointment and my credit card. Thanks everyone \o/

Steeze

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Re: Got rejected for a credit card
« Reply #26 on: September 15, 2020, 08:55:29 AM »
Nice, congrats!

 

Wow, a phone plan for fifteen bucks!