Credit Advice

Application declined with no “negative items”


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Credit Advice

Application declined with no “negative items”

Dear Experian,

If I have no negative items, why is it that I am declined for a credit card?


Dear IKE,

You should get a letter from the credit card provider explaining why you were declined or inviting you to contact them to find out why. Only they can tell you the factors that influenced their decision. The reasons may have nothing at all to do with your credit report.

For instance, I have a colleague who, years ago, had an application declined because he had not been employed at his job long enough to show stability. Because it wasn’t clear that his income was stable, the lender chose to decline his application.

Some lenders also consider your income or whether you own or rent your home. Another factor that can be considered is their experience with you in another division of their company.

But, it is important to understand that issues in your credit history may be important, even though they are not listed as “negative items.” Negative items usually are defined as late payments, collection accounts, tax liens, or bankruptcy. But, those are not the only things in your credit report that could have detrimental impact on the credit card provider’s decision.

High balances as compared to your credit limits, having no other credit cards, or even having little or no credit history can be very negative, but not be shown in a “negative items” list.

These issues are indicators of risk for several reasons. In the case of high balances, you may not have any late payments, but the balances indicate you are overusing your credit and may be on the verge of having payment problems.

Having few or no credit cards or little or no credit history is problematic because you have no history on which the credit card provider can base its decision.

Your credit report is similar to work references on a job resume. Having no credit history is like having no job references. There just isn’t anything to base a decision on, so your application may be declined.

This is by no means a complete list of issues. There are many other things that a particular credit card provider could feel indicates risk. The issues specific to your situation should be identified by the credit card company.

Thanks for asking.

- The "Ask Experian" team

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