If you come to me asking for a loan of $500 with no way to pay it back even if I charge you 200% interest I still am going to be out $500.

Companies make money by lending it to people with a means to pay it back. People with good credit scores and low debt to income ratios get the best lines of credit and interest rates. Those that have poor credit scores and high debt to income ratios get lower lines of credit and higher interest rates. Those that have no income or extremely poor credit scores (especially ones with bankruptcies and serious delinquencies) do not get credit. At some point the risk gets too great for a company and they say no.