Instant credit is not really instantaneous, although the process generally takes just a few minutes. You can apply for an instant credit card or other account online or at a retail store. The lender checks your credit report and decides whether to open an account immediately, investigate further or deny your application. Many factors influence your creditworthiness, according to credit score company Fair Isaac Corporation, which created the FICO score, so you could be turned down for a variety of reasons.
Delinquent Payments
Lenders do not like to extend more credit to people who are regularly making delinquent payments on their existing accounts. FICO explains that your payment history is a major factor in your score. You are unlikely to be able to make timely payments on a new account if you cannot handle your current financial obligations.
High Balances
Lenders check your current account balances before granting more credit, even if you are current on your payments. You may not be able to handle the new instant credit account if you have a lot of debt and are only making minimum payments on the existing accounts. FICO explains that lenders also compare your balances to your available credit limits before extending a new line.
Other New Accounts
You may not be able to get instant credit if you recently opened several other new accounts. FICO explains that lenders look negatively on consumers who open too many accounts within a short time. They also look at the number of times other creditors have reviewed your credit reports, even if you were turned down for those accounts.
Credit History
You may be turned down for instant credit if you do not have much of a credit history, even if you have modest balances and pay your bills on time. Some lenders want you to have a mix of revolving and installment accounts, according to MSN Money columnist Liz Pulliam Weston. They also like to see a lengthy history before they will open an account. FICO explains that it considers the amount of time you've had your accounts and the time since your last activity, so inactive accounts do not help.
Identity Theft
Identity theft victims often do not realize their information has been stolen until they suffer unexpected negative effects. The Federal Trade Commission warns that you might be turned down for credit if you are a victim, even if you handle your finances responsibly, because thieves have opened accounts in your name. They charge as much as possible, then abandon the accounts. The bills quickly become delinquent, but you do not know until your instant credit application is denied because the fraudulent statements are going to a different address.
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