More than 60% of adult Americans are using credit cards. A large number of Americans use credit cards to handle their expenses while only a few people use them for separating business expenses. Using a credit card is very easy but keeping discipline in repayments is very difficult. That’s why many people use prepaid cards to understand the insights of credit cards. Also, Merrick bank secured visa reviews and reflex MasterCard reviews are very important for maximizing the usage of credit cards. While applying for a credit card, an individual has to fill a document called Application form. In the past, individuals had to go to the office for filling the forms. However, by understanding the effects of covid-19, many companies are now switching to the online process of filling forms. This means individuals have to visit the Websites, upload the forms and submit the details. In a few minutes, the professionals reply to the applications (if they are accepted or rejected). Individuals may be surprised to know that in many cases like (Regions secured credit card), there are no payment verification checks. For more details on this individuals should visit, how do credit card companies verify income. Even after following all the steps for approval, many individuals commit multiple mistakes due to which they’ve to face rejections: Below are some explained: Incorrect Data: The first and the most common mistake committed by applicants is incorrect data. While filling the applications, banks and companies ask information like current income and current gross income. The gross income is the total income without any expenses and the net income is calculated after deducting expenses. Instead of filling the incorrect information, it is good to ask. Having multiple credit cards: Many individuals follow the reviews of credit card experts. They don’t increase the usage beyond 30% (utilisation Ratio). To increase usage, they purchase multiple credit cards. For example, they maintain the ratio but use 30% of multiple cards. Now if a user has multiple credit cards then his application is simply rejected. For example, if the income of a user is $30,000 and he has two unsecured cards with a credit limit of $10,000 respectively. As soon as the user files another application, it is rejected. Low credit score: Individuals should check the requirements of cards before applying for credit cards. The company asking for 500+ credit score won’t allow the applicants with 300 Credit score. Here his application is simply rejected and credit score is also affected. That’s why it is important to check the reviews for the best understanding. However, there are some cards in which there are no strict income verification checks. Let’s check them: Secured credit cards: Secured credit cards are backed by the collateral. This means a user who’s interested in purchasing the card has to deposit collateral equal to the credit limit. For example, if he’s applying for a secured credit card with $1,000 then he has to deposit the same amount. This credit limit can be increased as per need. With the increase in the credit limit, the collateral amount also increases. The companies don’t have strict verification checks because the applicants are depositing collateral. There are multiple benefits of using secured credit cards. For example, users with bad credit or no credit history can purchase them. As the collateral is there, Companies don’t think that the money at risk. Users can also use them to improve credit scores. Prepaid cards: Companies don’t verify income while selling prepaid cards. The reason is simple as the money deposited in the prepaid cards is not borrowed. That’s why the credit scores are also not affected. Using prepaid cards is the perfect choice for learning how to manage expenses. Accordingly, users can control expenses while using unsecured credit cards. Unverified location: In many cases, individuals have rental properties. So when the bank employees are visiting they find someone else or no one. Well, that’s not a common reason but in many cases, individuals have faced the same problem. Unqualified age: Banks and companies have strict checks on age. It is just another reason for Credit Card rejection. Bad credit history: Credit score is comprising of 5 factors. These are payment history, utilisation Ratio, new Credit, credit mix and credit history (also called credit length). In many cases, users have bad credit scores but they settle their deals. However, when users have defaulted on a huge amount, banks and companies put them in the defaulters’ list. So when these users apply for new credit cards, the applications are simply rejected. After putting them in defaulters list, banks and companies forward the information to credit bureaus who update their Databases quickly. Signature mismatch: Signature mismatch is another common reason for rejection. However, this problem is easily solved by filling another form. This rejection has a negligible effect on credit score.
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