For financially savvy people, credit cards are a great tool for managing your finances. And why not? Credit cards can give you more shopping freedom and allow you to manage payments according to your monthly budget.

Not only that, credit cards often come with cool perks for users, like discounts at certain outlets, vouchers, points, rewards, and much more. But with these benefits comes a strict selection process, so there’s always a chance your application might get rejected.

If your credit card application gets denied, don’t worry! Check out some common reasons why applications are rejected and what you can do to ensure your next application gets approved.

Why Was Your Credit Card Application Rejected?

Your credit card application might be rejected for several reasons:

1. Incomplete Supporting Documents

The first reason your credit card might be rejected is incomplete documents. Typically, credit cards require you to submit several documents, such as:

• A copy of your ID (KTP)
• A copy of your Taxpayer Identification Number (NPWP)
• A copy of your savings account book
• A copy of your pay slip
• etc.

These documents are needed to assess your eligibility for a credit card. If you don’t provide all the required documents, your application will likely be rejected automatically.

2. Incomplete or Incorrect Information

Never provide incomplete or incorrect information when completing a credit card application form! The bank’s evaluation team will do a background check or research on the information you provide. If the information isn’t accurate, the bank might get suspicious of your intentions and reject your application.

3. Unstable Job or Insufficient Income

A key aspect the bank evaluates during the credit card application process is whether your income is sufficient to pay off the credit card bills. Generally, you need a stable job with a minimum monthly income of Rp3 million. This ensures that you can pay your bills consistently and on time.

4. Too Many Existing Loans

If you still have several active loans, it’s better not to apply for a credit card just yet, as the selection process will be tougher, and you’re more likely to be rejected.

Why? Having many outstanding loans makes the bank less confident in your ability to pay off your credit card bills. So, make sure to settle other loans first. Another approach is to ensure that your existing loans aren’t too many or are close to being fully paid off.

5. Poor Credit Score

The previous point is closely related to your credit score. If you have too many loans and are not disciplined in paying them, your credit score, according to SLIK OJK, will likely be poor.

How is a credit score calculated? The bank will perform a BI Checking to see whether your credit score is good or bad. Here’s the basis for credit score assessment according to OJK:

• Collectibility 1 (KOL 1): Current
• Collectibility 2 (KOL 2): Special Mention
• Collectibility 3 (KOL 3): Substandard
• Collectibility 4 (KOL 4): Doubtful
• Collectibility 5 (KOL 5): Loss

Your credit score will automatically fall into KOL 4 or KOL 5 if you have unpaid debts. Consequently, your credit card application will also be automatically rejected.

Solutions If Your Credit Card Application Is Rejected

Even if your credit card application is denied for now, there are a few practical solutions you can try:

1. Reduce Previous Loans

The most important tip is to ensure you don’t have too much outstanding debt when applying for a credit card. Prioritize paying off your most important loans first. Also, settle previous loans and pay bills on time to keep your SLIK OJK credit score safe.

2. Wait 3 Months After the Last Application

It’s a good idea to wait about 3 months before applying for a new credit card again. This allows time to improve your credit score and financial history. Applying for a credit card too often in a short period can give the bank the impression that you’re desperate and in urgent need of credit, which can lower your chances of approval.

3. Ensure Complete and Honest Documentation

When applying again, fill out the documents thoroughly and honestly. If the documents usually required by banks are too complicated, you can also try Honest Credit Card. The application process is 100% online through the app, and all you need is your ID (KTP) to apply for a credit card. Super simple! No need to worry about data leaks since Honest is licensed and regulated by Bank Indonesia (BI) and the Financial Services Authority (OJK).

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Through the Honest app, you can fill in the required information, verify your identity, as well as get approval and activate the physical card, which will be sent to your address.

So, those are some reasons why credit card applications get rejected and the solutions you can try. Make sure you understand the purpose and procedures of using a credit card so that your application process is successful and beneficial. Don’t forget to pay on time and not get carried away by high limits so your credit score stays safe!

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