Even if you’re not a fan of using credit cards, it’s easy to get lured into applying for one thanks to the endless media promotions for cards with double miles, 100,000-point sign-up bonuses or other perks. But you should take a careful look at your personal financial situation before you apply for any cards. Lenders have been tightening standards throughout the coronavirus pandemic, and it can still be harder to get approved for a credit card right now than you might think. Since a declined application can ding your credit score by a few points, make sure you’re in a position to succeed by reviewing these common reasons for getting declined.

                By                    John Csiszar

Lenders Are Taking On Less Risk

The primary reason that lenders tighten their standards is to reduce company risk. A credit card, after all, is an unsecured loan. This means that when a lender agrees to issue you a card, it’s relying on nothing more than your promise to pay back what you spend on the card. This is an inherently risky proposition, as a distressed or neglectful lender can usually get credit card debt discharged in bankruptcy if they choose to go that route. Even though the country is slowly recovering from the coronavirus pandemic, making loans in the current economic environment still carries an elevated risk for card issuers, forcing them to tighten their standards. 

See: What Happens When You Get Denied for a Credit Card — And What To Do NextFind Out: Why It’s Still Better To Use Your Credit Card Over Your Debit Card

Find Out: 90-Second Moves To Raise Your Credit Score 200 PointsLearn More: 10 Things to Do Now If You Have a 500 Credit Score

Your Income Might Not Have Been Consistent Recently

When you apply for an unsecured loan, like a credit card, your creditor wants to know that you can pay it back. One of the ways they determine this is to ask you for your income. Many Americans had reduced income in 2020 and/or 2021, due to either reduced hours, a furlough or becoming unemployed. If you fall into any of these categories, creditors will be less likely to approve you for a credit card because it means they would be taking on additional risk. 

Check Out: 10 Credit Cards To Consider for Travel Rewards

You May Have Been in Rental or Mortgage Forbearance

The government enacted a number of measures to help Americans weather the economic storm caused by the COVID-19 pandemic. Two of these were rental and mortgage forbearance. In both cases, consumers were granted a window during which they did not have to make their rental or mortgage payments. They were also protected from eviction or other adverse actions. Now that these programs have ended, some Americans are having trouble keeping up with their payments. If this applies to you, you will likely find it harder to get approved for a credit card.

Discover: What Is a Good Credit Score?

You May Have Missed Some Payments

Although renters and homeowners were granted a level of protection during the heart of the pandemic, the same wasn’t true for most other borrowers. If you have a car loan, credit cards, a personal loan or most any other type of borrowing, your payment schedule likely remained intact. If you suffered a loss of income during the pandemic, you might have fallen behind in some of your payments. This can seriously impact your credit score, which will consequently reduce your chances of getting approved for a credit card.

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Last updated: Oct. 13, 2021