Do I Have The Rights to Know The Reason if a Bank Declines My Credit Card Application

Hi Guys,

I recently applied for a credit card from HSBC. they declined my application. I am a little disappointed, but the most frustrating part is that they refuse to tell me the reasons. I feel like I have the rights to know that, because shouldn't the process be transparent? Should I file a complaint to AFCA?

Would love to hear your thoughts.

Many thanks!


  • +73


    • -15

      you mean I don't have the rights to know why?

      • +41

        No. Credit is not a right.

        • +4

          no you didn't get my point. I am ok if they don't give credit. but I think they should let me know why.

          • +5

            @Albert10: So that you'll know what to put on your application next time so you'll get credit?

            That's not a right.

            • +7

              @Ughhh: I thought we put in true and verifiable information

          • +10

            @Albert10: You will receive a letter or email shortly detailing a few general reasons why.

            The best thing to do is request a free credit report on your equifax file to see if there are any issues with it

            • -1

              @Cyphar: nah, got the email a few days ago. didn't say anything. called them to ask reasons, they refused.

              • -6

                @Albert10: I heard about banks refusing credit cards to people who have really good credit score and payment histories because they know they won't make any money off them !

            • +1

              @Cyphar: make sure not to use your real email address when checking your report. The amount of spam I got after checking mine was insane!

          • @Albert10: They shouldn't let you know anything. They choose to reject you its their choice.

  • +2

    Too many reasons. I hope you haven't been going around applying for credit cards left and right.

    • definitely not. only applied for one about 2 years ago.

      • +1

        what happened 2 years back ? did they approve it ?

  • +14

    No No such right.
    Its a secret held by banks. Imagine if we know, we will game the systems and get all the credit cards we want.

    • Exactly. Even when I worked in credit card operations we couldn't know the criteria.

      That said, every bank is different and you might qualify somewhere else, but it's a bad idea to try a lot of different places.

    • +1

      I'd get a thousand credit cards, that should be enough to live comfortably until I die.

      • Then you will get the shock of your life when you apply for a home loan.

        • +13

          I’ll just put my home or rent on my credit cards.

  • +9

    I was knocked back for an ANZ Credit Card, first I'd applied for in a while - well over the income cap.
    After being a bit tough with them on the phone they said as long as there was any reference to JobKeeper on my payslips (we were stood down over lockdown period) then I would be declined.
    New financial year any reference to JobKeeper will be booted off my YTD on the payslip and I can apply again.

    Not sure if this applies to you - I'm sure there's a hundred other possible reasons.

    • +1

      well, I wish they have told me why. but they just don't. keep saying they can't disclose the reasons.

      • +6

        They can if they wanted to, no one is stopping them, they just wont.

        Cant and wont aren't the same thing.

      • +1

        I had a similar issue, it took a while and it was like getting blood from a stone but in the end the customer service team encouraged me to visit in branch. In the branch the sales person was surprised that I had been declined. He gave the team a call and said it might be because I recently moved. Not sure whether that was legit or not but the bank I dealt with seemed to have a harder application process than most (looked at old ozbargain posts).

        Applied 6 months later with ANZ having just switched jobs and didn't have a problem.

      • +1

        I can confirm that there is policy that determines what a staff member can and cannot disclose to customers.
        It's not that they don't want to (pretty much everybody who works in a bank is also a customer somewhere), sometimes they are just not allowed to.

        There are also a host of regulations and laws surrounding the transfer of different kinds of information. Pretty much all banks will also tell staff, "if you're not sure whether to divulge information or not, do not do so."

        • Can confirm jatyap speaks the truth.

    • what's YTD please?

      • +1

        Year to date.

  • +9

    They aren't owed you a reason, no because they are a business entity, not your government.

    • If you walk into a shop, can they refuse to serve you without a reason?

      • +44

        Absolutely. As long as it isn’t for discrimination reasons.

        • +11

          but how do you know if they don't tell you

          • +6

            @Albert10: You would have to be able to prove otherwise(A discriminatory comment for example)

      • +21

        Yes, businesses can absolutely choose who they do business with…

        • This is absolutely true (except for discriminatory reasons).

          Which is why I’m baffled when right wingers complain about community campaigns (they like to call it ‘cancel culture’) on business from interest groups. The business can choose to listen or not.

          • @Vote for Pedro: And then we choose not to buy if they listen to them

            • @fadeinthemix: No disagreement there from me. Just suggesting the sky/newscorp brigade don’t cry that ‘woke hippies are trying to cancel everything’.

              People can protest, business can listen or not and people can buy from business or not.

              I support free speech as long as its not discriminatory or inciting hate.

        • I like how Christian Hull explains it in one of his videos.

        • -4

          basically, they have to have a reason though.

          • +6

            @Albert10: And the bank does have a reason for refusing you credit.

            They're just refusing to tell you that reason.

      • Sure, that is how K-mart roll… lol

      • They can't discriminate against you for a set of specific attributes such as race, gender, or disability. Other than that they can refuse. So, depending on how keen you are - accuse them of discrimination for denying you a credit card. Then they'll have to tell you why you were refused. It will probably just be "did not meet lending criteria".

  • +7

    Check your credit history with equifix and its free, maybe it will tell you something.

    • I was going to say the same. What does your credit history show?

      • i had the same issue when applying for ANZ credit cards (2 different products from them) and when i checked my credit report equifax, that doesn't raise any red flag to me - no late payments, no other credit cards, well i went with Qantas Premier and thinking of ditching it now for a Qantas Amex Premium, should I apply first and once approved cancel the current one or should I cancel first advice please?

  • +3

    OP, seeing all the comments above.

    Why don't you tell us what you can for OzB community to assess if you should qualify for a Credit card? Maybe it is something obvious, but we don't know anything about what you put through or applied for etc…

  • +3

    Thanks All for your replies. what I wanted to know is that the bank should keep the process transparent to the customers. looks like all of you disagree. well that's probably how it works. So I won't waste time making a complaint then…
    To me that credit card is not that important after all, just felt there could be something unfair if they do tell me. That's all.
    Thanks for your time guys! much appreciated. Good night…

    • +14

      by the way, my credit score is over 800, and the report from equifax is all green. I haven't had any credit issues ever. never had credit card application refused. that's the main reason I really wanted them to tell me why.

      • +2

        You may put it to Banking Ombudsman.

        I had similar issue with UBank. Wanted to break fixed term loan and they said some exorbitant amount as break cost (more than 4K difference). I asked them to explain. They refused saying
        legally I wasn’t allowed. This cost is made up of two parts. One the interest rate and other some secret deal with their lender partner. I asked them to reveal only their part. They refused again saying this would disclose secret amount.

        I put up through to ombudsman asking only the calculation part with UBank (not the secret one). UBank had to disclose this and eventually I was told the secret amount as well. 😂

        • +1

          I had similar issue with UBank. Wanted to break fixed term loan and they said some exorbitant amount as break cost (more than 4K difference).

          This is a completely different situation. You're asking for a number they're refusing to tell you. OP is asking for reasons that do not exist (see my post below).

          • @p1 ama: Yup. Different situation but same outcome. Refusal.
            What I am saying is there is no harm to put it through to Ombudsman. There is high chance he would get the answer from bank.
            The applicant has every right to know the rejection specifically when there is credit hit because of this.

            • @PopCounty:

              What I am saying is there is no harm to put it through to Ombudsman.

              If you don't value your time, then sure.

              There is high chance he would get the answer from bank.

              There isn't because no specific reason exists that's just sitting somewhere on a system.

        • Break fees on fixed rate loans is very standard. I work in the banking industry. If you lock in a fixed rate, you need to be ready to take the benefits (if interest rates go up, you keep the lower rate) as well as the risks (if interest rates go down, you keep the higher rate). The break fee is the economic difference between your higher rate, and the lower rate over the remaining term of the loan.

          There is no secret deal with their lender partner, UBank are owned by NAB - but its possible NAB hedge this fixed interest rate risk on the wholesale market.

          • @s3th2000: Agreed and I am not denying that.

            If someone is breaking fixed rate a year earlier then the anticipation is to calculate the interest rate for remaining time (1 yr in this case) + some breaking cost. Say this turns out to be 5k.

            But wouldn’t you wish to know when the bank says break cost is 10k? How on earth that calculation happened?

            Bank has every right to set the price via wholesale market or anything for which the customer agreed. But simply it can’t be tolerated when then say 5k is their interest rate and remaining 5k is their processing fee with lender partner as they have agreement with them (advantage I guess). To a customer it’s a double dip. Ok fine we signed contract and will give that amount but show me how it’s calculated.

      • maybe credit application was rejected due to serviceability? do you have too many other credit cards / loans vs income perhaps?

    • +2

      They probably aren't telling you because it could be something unfair. There are a lot of things that you can do for no reason but can't do for any reason. If you are trying to go after them for discrimination they aren't going to hand over evidence without a fight.

  • +9

    Unfortunately you have to toe the line between being able to easily pay back the debt and never being able to pay it off.

    They don't want people that'll never rack up debt and they don't want someone who'll default. So if you're in either of these areas they'll likely reject you.

    Credit card companies all have different algorithms and i believe the right to the reason for rejection would undermine their competitive advantage i believe.

    For me Citi has been the hardest, followed by St George/BoM then HSBC.

    Ever since Covid i feel they've tightened their hip pockets.

    • +1

      Citi rejected me years ago, when I applied for their signature card that was fee free for life. They too wouldn't tell me the reasons.

  • Are you a self employed, contractor or casual worker?

    • no, always employed.

      • So full time employment?

        Chances are you failed serviceability, or you fell below their internal credit score (which combines all your application data into a score which reflects your overall credit risk).

  • I applied for the same card. Went through their clunky application process, got conditional approval, submitted some extra documents (as I'd recently changed address). Their ID check site wouldn't scan my license properly so I had to goto Australia Post not once but twice. Then I got an email saying I'd been declined.

    Sometimes you win, sometimes you loose. HSBC has the most clunky IT system of all the banks I've ever used. I'll keep the 2% cashback debit card but won't consider them for anything else after this experience. This is the first time I've ever been declined for credit.

  • -3

    I am very curious OP. You make a post asking for our opinion about whether the bank has a "right" to refuse you. We gave you our opinion, but then you proceed to argue with us.

    Why don't you go argue with the bank instead? You are the one who wanted to know our opinion.

  • +23

    OP, I am sorry for all the negs you have been getting for asking a genuine question. Sometimes this forum can be quick to judge when all people want is just simply an understanding as to why things that seem to be logical, is actually not being followed and you want to know why.

    I too was annoyed when I haven't been applying for any card for more than 3 years and when I did, I get declined with no reason.

    I have asked around a number of people including those people working inside the industry, the official reason why they declined applications without reason is because of the (possibly undisclosed) industry agreement to NOT to disclose reasons for any declined application in order for you to NOT change your behaviour so you wouldn't "game" the system.

    What constitutes "gaming" the system is quite arbitrary and not every bank is very universal about it. What is clear is that there is an industry agreement to NOT state the reason on declined application. This is done on purpose, maybe related to the Responsible Lending.

    There is a way going around it which is best not mentioned in this forum (as you can see yourself) but the best advice I can give is for banks like HSBC/Citibank, unless you are invited to apply, don't bother with these banks. The key word is "invited". I'll leave it to you to figure out how to get "invited".

    • +1

      HSBC/Citibank … don't bother with these banks

      That is my view as well - too many Citi rejections for no discernible reason, while the big banks will happily approve me for $15k+.

    • +6

      thanks very much. much appreciated. finally someone in the forum not looking at me like a credit thief(Lol). thanks for your advice, very helpful! I will keep away from those "foreign banks" from now on.

    • How does one get invited? By being an international money laundering criminal syndicate? That seems to be the type of customer HSBC loves.

      • Example 1…

        Recently I got an invite to apply for a particular card which was useful for my purpose, I put in the application with some documentation but nowhere near the one that ended up rejecting me (see below) and 24 hours later, voila.

        In contrast, a few months earlier, same bank same card, applied with lots of documentation (they asked for my bank statement) and a week later, rejected.

        Example 2…

        This is HSBC. Join in their Premier Banking and you should get invited into applying for their Premier World Mastercard. I am only saying the name of the bank so they get support. With Citibank on the way out, we need more competition.

  • +13

    A while back i had a credit card application approved by Westpac and then once the card was sent to me it was cancelled
    They refused to tell my why they backflipped
    I pushed and they again refused so i thought eff it and took them to the ombudsman
    they used the excuse (valid one apparently) that telling me the reason why would expose their assessment criteria

    Sufficed to say i closed all my Westpac accounts and took the 2 home loans i had with them elsewhere.

    Sadly, they are allowed to keep secret the reasons to protect the integrity of their assessment criteria to prevent it being abused for fraud etc

    On a side note when the Westpac retentions team called me to get me to try and leave my home loans with them the retentions officer "looked into it" and found that errors were made by the assessment officer when processing my cc application. Not sure what that meant but regardless i made it clear that no matter the offer i would not be a westpac customer going forward.

    • Interesting - a few years ago I got conditionally approved for a Westpac CC, provided payslips, and then they declined. Called them up to ask why, and was told it was because super wasn't shown on my payslips so they thought I was casual. Gave them some proof I wasn't, CC gets properly approved and no further issues.

      I wasn't even a customer of theirs!

      • I was actually approved,
        card arrived and i activated it.

        2 days after i activated it got an email saying upon assessment card was cancelled

      • That's a bogus reason they gave you in the first place. Casuals get paid the SGC unless earning under a very low threshold ($450pcm now and about to change). Whether it's on your payslips or not is no guide to employment status. It's holiday accrual, or lack thereof, that is a guide to employment status as casuals' payslips don't show any accrued holiday leave. Someone stuffed up.

        • Honestly it could have been leave that was missing, I can't remember exactly as it was a few years ago. I just know it was not on my payslips so they thought I was casual.

    • +8

      Good move. And when they asked you about it, you should have said "you failed my assessment criteria".

  • +1

    Sorry OP, I think they should give a reason but people say its not essential.

    It could be your skin colour, name, children, etc for all you know.

    • +9

      looks like many people are pretty ok with big banks having the power to squeeze them. I am quite surprised to see that tbh

      • +1

        looks like many people are pretty ok with big banks having the power to squeeze them

        Given that its basically their money they're lending you and they're bound by Australian responsible lending laws… if they don't want your business, they don't have to tell you why.

        Would you willy nilly just lend out money?

        • Would you willy nilly just lend out money?

          no I wouldn't but I wouldn't hide reasons either

          • @Albert10: If you don't hide reasons then sure as the sun rises in the east people will use that information to game the system.

  • There are lending platforms on the market that doesn't require credit checks. These platforms don't discriminate and are available to anyone regardless of their income or background information. People can borrow an unlimited amount of money as long as they've enough collateral to back up the loan.

    There are also ways for the borrowers to fold the loans. This allows them to earn enough interest on their lending so that it covers the interest of the loan.

    Borrowers can add a debit card that gives 2% to 8% cashback to this setup to earn money while they enjoy interest-free spending.

    Break free from the old banking system and come over the 21st Century financial system.

    • Any examples and links?

      • -1

        Afterpay doesn't do credit checks

        • Afterpay doesn't come anywhere close to the platforms that rektreding describes.

          I'm looking to break free.

    • +1

      Such as?

  • Conduct a credit score check… found out whether there are any "red flags" or other issues against your name.

    • Huge Red flag found : Ozbargain member

  • +5

    It's because they know you're member of Ozbargain. They know you will pay off your debt in time, call up for the annual fees waiver and use your card wisely. In other words, you won't be making any money for them :)

  • TL:DR You don't meet their eligibility requirements

    A computer makes the decision. Computer said 0 in your case

    It's up to you to do the legwork now with obtaining credit reports, seeing if your loan complies with the requirements of the National Consumer Credit Protection Act, or maybe the bank will not meet the capital adequacy requirements to make your loan.

    However, most likely, you haven't met the 5 C's test:
    Character—the applicant's credit history.
    Capacity—the applicant's debt-to-income ratio.
    Capital—the amount of money an applicant has.
    Collateral—an asset that can back or act as security for the loan.
    Conditions—the purpose of the loan, the amount involved, and prevailing interest rates.

    • You are making it sound like a home loan application which this one isn't.

      • +3

        credit card is unsecured loan, i would have thought it more difficult to obtain than a home loan.

    • -1

      The above 5 C's test smells like a home loan assessment criteria.

      • +2

        It is the basis of every credit application a person makes. A credit card application will make reference to all these points. The bank needs to form a balance sheet of all these to make sure an applicant is credit-worthy, especially with the recently increased regulation of credit.

  • +1

    I was rejected for a St George credit card because the offshore employee that processed my application didn't know how to read a pay slip. I went into the branch and they were able to tell me the exact reason why it was rejected. I applied again straight away without issue.

    • +1

      This is exactly why I would like to know why if they reject my application. Surely a write of reply to explain my side of the story would be sensible - I'm sure there are many situations where there is a misunderstanding of some of the data, etc.

  • +1

    I wanted a amex card for the statement credits but was rejected. No mention of why, credit score just short of 900. Assume it was because I already had 2 other cards for the price protection, rewards etc. Maybe they don't appreciate people just signing up for the rewards and not the credit.

    • -2

      Maybe they don't appreciate people just signing up for the rewards and not the credit.

      You can sign up for the rewards and not the credit? If I knew that I'd do it all the time. I figured the only way to get the rewards was sign up for the credit?

  • +6

    I I worked in the team that builds these algorithms that churn out essentially a Yes or No to a credit application.

    The banks spends millions on dollars on economists, data scientists, actuaries, coders, testers etc to formulate the best calculations that will bring in good customers and filter out riskier clients without being 'too harsh'. These are constantly being reviewed when anything happens, hike in rates, unemployment rates, pandemic, economic growth or contraction.

    The process is designed so that everyone trusts the computer without question.

    The front line staff do not know how the answer is dervived, nor their managers for those who 'want to speak to a senior.

    So it is equally they don't want to be transparent and they don't actually know. The computer doesn't actually tell you why it said no, and where the items of concern are, eg. income, a casual worker vs permanent with long tenure or a single bread winner with many children.

    • Second this, as a software developer with some dabble in statistics and machine learning.

      The number of variables going into these models are huge and change constantly, including some outside of the borrowers control such as the bank's lending capacity. On a day when they can lend more the model will be more relaxed and other days not so much.

      The best a staff member could do is nudge some of these inputs to try figure out what it might be but it's never definitive.