Why you may be declined even with no late payments

Dear Experian,

If it says on my report that I have zero negative items and zero accounts in good standing why would I be denied a credit card if I pay my bills regularly. Nothing is behind as far as I can see.



Dear ICI,

Being behind isn’t the only thing that indicates credit risk and may negatively affect credit scores.

While you have zero negative items, you also have no accounts in good standing. That suggests you have little or no active, recent credit history. With no credit history there may be insufficient information upon which to base a lending decision.

Recent credit activity is necessary for predicting lending risk, and therefore, for calculating credit scores.

You say that you pay your bills on time, but you don’t say what those bills are. Apparently, they are not bills for credit card or installment debt. Paying utility bills, cellular telephone bills, or other monthly fees is not reported to the national credit reporting companies, and so don’t help you qualify for a credit card offer.

Ask your bank or credit union if it can work with you to open a credit account. Even a small installment loan can help get you started. A positive payment history is the first step toward qualifying for a new credit card account.

Thanks for asking.

- The “Ask Experian” team

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