Obtaining a secured credit card is an effective way for people to establish or rebuild their credit histories. You only have to pay a small amount of money up front, usually $300 to $400, before using the card. In some cases, you may be turned down for a secure card, which can be frustrating. Below are a couple reasons why creditors reject people who apply for secured credit cards.

Your Income Isn’t Verifiable

You may be turned down for a secured card if you’ve just started a new job and don’t have any pay stubs to verify your income or if you work under the table and don’t claim any of your income on your tax return. You may also be rejected if you operate a home business, but this is your first year in business. If the creditor can’t determine if you have money, the company won’t be eager to offer you a secured card. If you want to overcome this problem, you must develop a source of verifiable income. Verifiable income isn’t just a lender requirement; it’s also required by the government. Even if the company wants to lend you money, they can’t without a verified income.

You Can’t Demonstrate You Can Pay

If you just racked up $80,000 in debt, and you’ve decided that bankruptcy is your best option, you probably won’t be eligible for a credit card of any sort, not even a secured one. The government wants lenders to verify that borrowers can pay their creditors to prevent creditors from taking advantage of people who are unable to repay loans. If your income is too low or you have too many bills, you may not be able to get a secured card. The only way to resolve this issue is to reduce your overall debt load or to increase your income.

If you’ve been turned down for a secured credit card, all hope is not lost. You still have a few options. First, be sure to read the notice you received that explains why you have been turned down for the card, as the lender must disclose the reasons for the rejection. You can apply for a different secured card with less stringent requirements, or you can address the issues with your credit history or income requirements. If you have a problem proving income, keep in mind that a lender can factor in child support, alimony and other types of income that you choose to report.