What to Do If Your Credit Card Application Is Denied
The moments after you press the submit button on a credit card application can feel like an eternity. While you hope for the best, there’s always a chance you can be denied.
Even with a great credit score, certain factors can stand between you and the perfect credit card. It’s not the end of the world. There are a few essential steps you can take to improve your chances of being approved the next time.
Wait for the credit card issuer to tell you the reason for your decision.
Credit card issuers look for the most qualified candidates to approve for a credit card. There are a few different reasons a credit card issuer could denied your application. For example, your credit score may be too low, your debt could be too high, your income may be too low, or you could have too many open credit cards.
By law, credit card issuers have to tell you the reason for a denied application. In 7-10 days after your application, you’ll receive a letter explaining why your application was not approved. Sometimes information in your credit report leads to a denied application. In that case, you’ll be able to receive a free copy of the credit report used in the decision.
Check your own credit.
It’s a good idea to be aware of your credit, particularly before you check your credit. If you were expecting to be approved, pull your latest credit report to see if there are errors or accounts you forgot about.
You can order a free credit report through AnnualCreditReport.com – each of your credit reports is free once each year. Third-party credit monitoring sites like Credit Karma and Credit Sesame are also a good option for checking your credit report for free.
Clean up any credit report errors.
Checking your credit report gives you a chance to clean up accounts that shouldn’t be listed. You can write to the credit bureaus asking them to remove accounts that aren’t yours, that cannot be verified, or that are out of date.
Once you’ve scrubbed errors from your credit report, consider applying for the credit card again. The credit card issuer will access your updated credit information to make a decision on on your new application.
Pay down some of your balances.
Having high credit card balances can make it harder to get approved for a credit card. Credit card issuers want to be sure you can afford to repay any balance you charge on the credit card, if you’re approved. Paying down some credit card balances reduces the total amount of debt you owe. Plus, reducing your debt gets you one step closer to being approved for a new credit card.
Apply for a different credit card.
While you shouldn’t put in multiple credit card applications in a short period of time (because it can hurt your credit score), it’s ok to apply for one or two more. If you’re continuing to be denied, you should wait to find out the reasons for the denials. Once you have a better understanding of how creditors view you, you can work to look like a responsible borrower.
Before you settle on the next credit card to apply for, make sure you’ve compared a few different credit cards. Check around for the credit requirements so you can be sure you’re applying for a credit card that fits your current credit standing. Rewards credit cards and zero interest credit cards often require you to have excellent credit to be approved.
Don’t take being denied personally. It simply means that there are some things with your finances that you should work on so you can be approved.
If you don’t have the best credit score, or you’re brand new to credit, getting approved for a credit card can be tough. A secured credit card is another option to help you establish credit. The secured credit card functions like a regular credit card. However, you’ll have to pay a deposit to secure the credit limit. It’s a good way to build your credit so you can reduce the odds of having a credit card application denied in the future.