Why YOUR Credit Cards are not getting Approved? || Every Paisa Matters

Summary

In this video, Amit highlights 10 common reasons why credit card applications get rejected, based on insights from banks and financial institutions. These include issues like incorrect PIN codes, existing credit cards with the same bank, low credit scores, and failed KYC verifications. He also covers problems such as duplicate applications, submitting false information, negative past usage with banks, and rejection during the underwriting process. Additionally, Amit touches on invite-only cards and the internal criteria of banks that can lead to rejection. The video provides essential tips for improving your chances of credit card approval.

Takeaways

• 😀 Your credit card application may be rejected if the PIN code you entered is outside the serviceable area of the bank.
• 😀 Banks often limit the number of credit cards issued to an individual. Having an existing card with the same bank could lead to rejection.
• 😀 Duplicate or parallel applications are a common reason for rejection, especially if you have incomplete or multiple submissions.
• 😀 A low credit score or poor payment history (below 750) increases the chances of your credit card application being rejected.
• 😀 Submitting false or incorrect information, such as fudged income or incorrect details, will lead to rejection and can damage future relationships with the bank.
• 😀 Failure to pass KYC verification (physical or virtual) will result in rejection, especially if your documents don't match or your location isn't serviceable.
• 😀 A negative banking history, such as past loan defaults or blocked accounts, could cause your application to be rejected by the bank.
• 😀 Internal scoring criteria used by banks may lead to rejection even if your credit score is good, based on other risk assessments.
• 😀 During the underwriting process, factors like credit exposure, income, and existing debts are assessed. If deemed risky, your application may be rejected.
• 😀 Sometimes, rejection is due to luck or bank-specific policies, like invite-only cards or internal restrictions that aren't disclosed publicly.

Q & A

Why might a credit card application be rejected based on the PIN code provided?

A credit card application can be rejected if the PIN code entered does not correspond to an area serviced by the bank or financial institution. Banks typically limit their credit card issuance to specific regions or cities.

Can a person hold multiple credit cards from the same bank?

It depends on the bank's policy. For example, Yes Bank allows only one credit card per customer, while Axis Bank allows a maximum of three. However, some banks like HSBC do not impose such limits, and you can apply for multiple cards.

What happens if someone applies for a credit card but has duplicate or parallel applications pending?

If there are duplicate or parallel applications, the bank may consider them as fraudulent or incomplete submissions. This can lead to rejection, especially if previous applications are still in process or have not been properly closed.

How does a low credit score affect credit card approval?

A low credit score, especially below 750, suggests a poor payment history or financial mismanagement. If a person has missed payments in the last 3 years or 1 year, the application is more likely to be rejected as banks may view them as a higher risk.

What is the impact of submitting false or incorrect information on a credit card application?

Providing false or incorrect information, such as inflated income or an incorrect address, can lead to automatic rejection. Furthermore, it can damage future relationships with the bank and make it difficult to get approved for credit in the future.

What causes failure in the KYC (Know Your Customer) process during credit card applications?

KYC failures can occur if the applicant is unable to provide the requested documents or if the location from which the verification is done is outside the serviceable radius. Virtual KYC (V-KYC) may also fail if the data submitted does not match the bank's requirements.

How does negative past usage with a bank affect credit card approval?

If an applicant has a history of poor payment records, defaults, or disputes with the bank, their credit card application is likely to be rejected. Banks do not want to take risks with customers who have a negative financial history.

What is the 'internal bank scoring' and how can it affect credit card approval?

Internal bank scoring is a proprietary system that banks use to assess a customer's creditworthiness. If a bank's internal review identifies any concerns, such as a high-risk profile, the application may be rejected despite having a good credit score.

What happens during the underwriting and risk assessment process for credit card applications?

During underwriting, the bank evaluates the applicant's financial stability, including their credit history, existing loans, and overall debt exposure. If the risk exposure is deemed too high or if other factors suggest potential problems, the application may be rejected.

Why might a well-qualified applicant still get their credit card application rejected?

Sometimes, even if an applicant has a good credit score, income, and payment history, they might be rejected due to factors like applying for an invite-only card or the bank not issuing cards for specific parameters at that time.