It may have always been in your plans to apply for a credit card for greater financial flexibility and convenience. If approved for one, you’ll get useful new opportunities to manage your expenses, build your credit history, and enjoy rewards that fit your lifestyle.
On the flip side, there’s a chance that your application will be denied. If this is something you’ve experienced firsthand, you might think of it as a permanent setback and take it to heart. However, you must remember that a lot of first-time credit card applicants face rejection for various reasons, such as not meeting the initial income requirements, having a limited or poor credit history, or applying for a card that doesn’t match their financial profile. Your first application doesn’t have to be the end of your credit card journey; it’s possible to improve upon your application and be approved for the credit card program that’s right for you.
While receiving a denial for the first time may indeed be disappointing, it also offers you a chance to assess and improve your financial situation before taking a second credit card application. If you’ve recently had your credit card application denied, remember that you can apply for it again and can be more successful the second time around with the right approach.
In that vein, here are some practical things you can do to improve your chances of approval on your second attempt:
1) Choose the Right Credit Card for You
One of the most common reasons for credit card application denials is that the applicant is trying to sign up for a card that doesn’t match their financial profile. If you don’t want your application to easily lead to rejection, it will be important for you to find a card that fits your needs and income level and that won’t yield a mismatch between your profile and the card’s requirements.
With this in mind, it’s crucial to choose a credit card that aligns with your profile. Many banks in the Philippines offer beginner-friendly cards with lower income requirements. If you have a limited credit history, cards like these can offer a better chance of approval compared to premium cards with higher income brackets. This makes it easier to start building a solid credit history while enjoying benefits that suit your everyday spending.
You’ll also want to choose a credit card that matches your lifestyle so that you can maximize its benefits. For example, if you purchase groceries in bulk or enjoy dining out, a card that offers cashback or rewards points in these categories, like the Landers Cashback Everywhere Credit Card by Maya, can help you save more in the long run and will make for an excellent second credit card. On the other hand, if you travel often, a card that offers travel rewards, such as miles or discounts on flights and hotel stays, can be more advantageous to you.
2) Review Your Credit Score
Your credit score also plays a significant role in getting approved for a credit card. A better credit score indicates to banks that you’re a responsible borrower and thus increases your chance of approval. Though it will take time to improve your credit score, your effort to do so can significantly impact your chances of approval when you reapply.
It’s also a good idea to check your credit score before submitting a new application. You can access a report through the Credit Information Corporation or any of its accredited credit bureaus. The basic principle is, if you know where you stand, you can easily identify areas that need improvement. If you’ve missed some payments or are carrying any high credit card balances, you’ll want to know about and address these issues to boost your score.
3) Wait at Least Three Months Before Reapplying
It may be tempting to immediately submit another application after a denial, but waiting for at least three months is a strategic move that can increase your approval chances. This waiting period allows time for any positive changes in your financial situation to reflect on your credit report, which in turn will make you a more attractive candidate to banks.
The wait is also important because applying too soon can result in another denial, as your financial profile might not have improved significantly. Lenders will always look for signs of stability and progress in your credit history, and rushing into a new application might suggest financial desperation on your part.
In addition, each credit card application results in a hard inquiry on your credit report. Too many hard inquiries within a short time frame can lower your credit score, which makes it even more challenging to get approved in the future. Knowing that, relax and take advantage of the wait time before passing an application again.
4) Use Your Current Credit Card Responsibly
If you already have a credit card, using it wisely can make a strong case for your next application. Be sure to demonstrate responsible credit behavior so that banks have proof that you can manage debt effectively. In the long run, this increases your chances of being approved for another card.
One key practice is to keep your credit utilization low. A common rule is to maintain your credit utilization below 30 percent of your card’s limit. This means if your credit limit is PHP 30,000, try to keep your balance below PHP 9,000. A lower utilization ratio will indicate that you’re not overly reliant on credit, which makes you appear more financially stable to lenders.
It’s also wise to pay off your balances in full each month rather than just making the minimum payments. Paying in full helps avoid interest charges and keeps your debt levels low, which will positively impact your credit score and show that you are a viable candidate for another card.
5) Prepare a Stronger Application
Lastly, when reapplying, refine your application in areas that give you the opportunity to do so, and provide updated and accurate information. A well-prepared application can significantly increase your approval chances, as it will provide lenders with a clearer picture of your financial standing.
A good place to start is by updating your employment and income details. If you’ve recently changed jobs, received a promotion, or experienced a salary increase, include these new details in your application. A higher income or more stable job can positively influence your chances of approval, as it will show lenders that you have the means to handle additional credit responsibly.
It will also serve you well to provide proof of a stable income. Attach recent payslips, a certificate of employment, or even your tax returns to your application to strengthen your case. This will reassure a bank that you have a consistent source of income and that you’re less likely to be a lower-risk borrower.
It’s true that a credit card denial can be disappointing, but it doesn’t mean it’s the end of the road. Consider doing the things mentioned above to significantly boost your chances of approval the second time around. Demonstrate a good mix of patience and persistence during the process, and eventually, approval might just be around the corner.
