Rejected for Credit Card

Jimpower on 13/05/2014 - 13:21
Last edited 13/05/2014 - 13:21

I hope the more experienced ozbargainers could give me some opinions or advices about this. I have been rejected for 3 different CCs this past 3 months, so it starts worrying me now. To start off, I am 25yo and working full time with income around 50k/year without any debt or dependant.

Admittedly, I never had a cc previously so that that might be an issue with them. The CCs that have been rejected are: Coles Master Card, Citi Bank Platinum Visa, and 28 degrees Master Card all of which are $0 annual fees ccs.

Looking at my credit report (free from veda), there's really not much information there, so I am at my wit's end.

Opinions?

Financial

Comments

  • thepigs on 13/05/2014 - 13:25
    +1

    Did you ring them up and ask why you were rejected?

    • Jimpower on 13/05/2014 - 13:34

      No I haven't, in hindsight I should have done that first. I will get on that tomorrow.

  • Smulder on 13/05/2014 - 13:28

    Go to the major bank that you have history with and apply for a card. They will be more likely to approve you if you have been with them for as while.

    Even if your initial balance is low, it won't be long before they are offering to increase your limit. And once you have a card and have some credit history, you will be more likely to be approved by the other non-bank lenders.

    • Jimpower on 13/05/2014 - 13:36

      My banks are ING and Ubank, so that rules out this option.

      I even set up my limit as $1k and still got rejected for the 28 degrees.

  • Baghern on 13/05/2014 - 13:29
    +2

    When I was 18 - income: student allowance… credit card .. no problems

    Your situation seems quite strange, maybe mixed up with another person with the same/similar name

    • altomic on 13/05/2014 - 15:38

      ditto.

  • c64 on 13/05/2014 - 13:51
    +6

    each time you apply for credit there is an entry on your credit history is added noting that. you shouldn't apply for any more credit cards in the short term

  • Paul Atreides on 13/05/2014 - 14:05

    that is weird, im earning 35k part time a year now, and i flew through the citibank application process. i didnt have to do anything else, i applied, and they sent me the card.

    my misses on the other hand earns considerably more than me, and she had to go in to auspost/citibank to prove id.

    we both opted for the 6k minimum credit limit.

    with that being said, all the bills (electricity - energy aust, mobiles, internet homephone - telstra) are under my name. this might have had a positive impact on my application.

  • postman on 13/05/2014 - 14:14

    Employment history/time with current employer can also affect your application.

    You should wait for 6 months before applying again and don't submit more than one application since it's your first card.

    It should be a good time for you to start building relationship with a bank that provides credit service and apply for a new card with them in the next 6 months or so.

    Best of luck!

    • Jimpower on 13/05/2014 - 14:50

      Thanks, I will probably not apply any more for the time being but I am going to try calling them tomorrow (at the very least I might as well try to find out why it was rejected).

      The weird thing was, citibank sent me an email saying it was conditionally approved and to submit my supporting documents within x days. Then 3 days later I received a mail that was dated on the same day as the email saying it has been rejected. But then again I never had a cc before, so that might be a standard process.

      My colleageu told me not to get too alarmed, but I feel something might be wrong since three $0 annual fees and low credit limit cc rejected my application in the span of 3 months (maybe the 3 months are not far apart enough for their considerations).

      • NosDan on 14/05/2014 - 11:58

        Employment history/time with current employer can also affect your application.

        id be interested to know how long OP has been employed. id guess its a safe bet not very long.

        maybe try getting a visa debit card with no overdraft. CC debt is often a bad slope to get into.

        • Jimpower on 14/05/2014 - 12:26

          2 years full time employment.

        • NosDan on 14/05/2014 - 13:43

          oh wow. that just dosnt make sense then. there has to be some other fairly good reason why you are getting denied.

          like i said, apply for a visa debit… anyone can get one of them caus there is no overdraft with it. then maybe in 6 months apply for an overdraft.

          another thing that looks good is if you have savings. try and get a few grand saved up in the bank your applying to over the next 6 months before applying again.

  • verio on 13/05/2014 - 14:51
    +2

    You should have not applied for the other cards right after you were rejected for the first time. Multiple rejections within the short period of time look very suspicious on your credit file. Now you would be better to wait for 6 months before applying again.

  • Sshanaz on 13/05/2014 - 15:53

    Go with the bank where you have main account - I mean where your employer deposist salary on a regular basis. They often won't reject your application.

  • spacecowboy on 13/05/2014 - 16:00

    They will look at any bill you have not settled on time as a reason to reject a credit application. This includes a mobile phone account, even late fees on a dvd store you did not pay. Anything like that ever happen to you?

  • sm007h on 13/05/2014 - 17:31
    +2

    The problem is, once you are rejected for a credit card, it shows up on your report. Other banks will most likely reject your application based on this.

  • Hikey on 13/05/2014 - 18:37

    Two years ago I applied two times for an Amex card (90k income, no negative credit history, no loans/credits, but living in a suburb with high crime stats). Got rejected both times. I applied again after moving to a different suburb, approved straight away. They might be using scoring systems based on your address.

  • grasstown on 13/05/2014 - 21:11

    Yeah I think this is strange

  • anna10 on 14/05/2014 - 07:37

    Citi at least will not tell you why the rejection.

  • GaryQ on 14/05/2014 - 08:48

    I had an $11k NAB card that was paid off in full every month reduced arbitrarily down to $2k because I have an ongoing dispute with a completely un-related financial institution.

    I waited six months and just to see what would happen, I applied to increase the NAB card to $4k. Went through without a murmur. These decisions are made by computers, not rational people.

  • [Deactivated] on 14/05/2014 - 09:40

    When I was at uni - banks were throwing around those $500 credit cards to anyone - I got a Commbank one and had no income except youth allowance. Make a few months payments on time and you could easily request a credit limit increase.

  • Amores on 14/05/2014 - 11:11

    I'm an international student, earning on ABN… CommBank gave me $9000 credit card last week. Without even asking for any proofs of income. I have an account with them for over 3 years though.

  • [Deactivated] on 14/05/2014 - 12:39

    Is the new credit reporting system biting you?

    http://www.news.com.au/finance/money/what-the-new-comprehens…

    This new system means every bill needs to be paid on time.

    I would also throw a hat into the 'bank with a normal bank' argument. Get some history with a traditional bank and start there. I know who ING are as I use them myself, but only for long term savings (I had no idea who UBank are, had to google). These online banks do not require a lot to setup so maybe they are viewed as questionable?

    I still have an account with a credit union and the first credit card was through there where they can instantly prove a savings history (the most important factor I would think).

    • [Deactivated] on 14/05/2014 - 14:01

      Ubank = NAB.

      If you have your money elsewhere, you are most likely missing out. Ubank has been the market leader in online savings for a while now.

  • ilostnemo on 14/05/2014 - 16:05

    The problem with the CRA report is it will have 3 enquiries on it from the 3 money providers.

    The report doesn't show if the money providers approved or declined your application.

    So what the bank could be thinking is A has borrowed you $5,000 B has borrowed you $5000 etc.

  • srhardy on 14/05/2014 - 17:49

    Request a copy of your credit report, you may have to pay for it & take a peek.

    • Baysew on 15/05/2014 - 10:12

      Looking at my credit report (free from veda), there's really not much information there, so I am at my wit's end.

      • [Deactivated] on 15/05/2014 - 13:46

        It is free if you can find the right links on their website, they try and hide it well.

  • tdw on 15/05/2014 - 14:39
    +1

    my first ever card was amex gold and got approved straight away. i was only earning something like $3k over their minimum qualifying salary. i think another factor is how much you state as your expenses. it can't be too much that they'll worry you don't pay it back but enough for them to think you might be paying interest on your balance

  • twister292 on 19/05/2014 - 05:29

    OP: My recommendation is also as some others said, get your salary into an account with one of the Big-4 (or any other major bank which offers both accounts and CCs) for a few months, and then apply for one with that institution. Also, it might help if you dont opt for a high-tier card at the very outset. Apply for a basic, no-frills card and take whatever limit it offers. After a few months, you can look at increasing limits and/or migrating to a higher tier of card.

    Credit card approvals and limits are pretty random and haphazard in my experience…my first one was with CBA, back when I was a uni student on a temporary visa and no job…it had a limit of $400. I didn't even have any of my primary banking accounts with them…Since then, they have pretty much offered a yearly increase of varying proportions, but now the limit on that card is $7600.

    When Westpac had the offer of lifetime fee waiver on their 55-Day Visa Platinum, I gave them my current information (full-time student on research scholarship + part-time job) and they approved it for $6,100.

    NAB's credit assessment online thinks I should get a $3,000 limit (which they can shove, I have no intentions of paying annual fees just to keep cards I dont even use).

    I had a David Jones Amex for a few months last year but closed it because of the $99 Annual fee…but in true ozbargain spirit, I redeemed the 30,000 bonus rewards points first! That one was approved for $2,000, but the lady filling out the info may have massaged some of the information, I cant say for sure because she filled the form.

    But here's the best part…of all things, ANZ's online application system first thought I should get a $2500 limit, another time it thought it should be $1,000…and in the branch, the officer punched the exact same information into what looked like a different program, and it came up with a limit of more than $23,000(!). ANZ do have my primary transaction and savings accounts for almost 8 years, so that might be a factor.

    AmEx dont think I qualify for the Escape Velocity and CitiBank dont think I make it for the platinum either. I didnt apply for either, but the reps said they didnt consider my research scholarship when counting income.

    It might seem a bit long, but as you can see, over a period of several years, I've had very different results from different institutions.

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