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Credit Card Application Declined? What to Do

Not everyone who applies is approved for a credit card. In most cases, a denial is related to your credit history. Applying for a credit card that requires good to excellent credit, when your credit is poor to fair, can mean a denial. If your credit card application is declined, though, you do have options. Here are some things to consider doing to remedy the situation:

Fair Credit Score

Be Careful About Applying Again

Because each credit card application you turn in is recorded in your credit file, too many applications in a short period of time can make you look desperate – and it can lower your credit score. If you are denied once, you should be careful about how you apply for another card. You might be able to apply for another card quickly, since it takes a couple of days for your initial application to show up. However, if your application for another card is denied, you should wait to find out what’s wrong.

Find Out the Reason for Denial and Fix It

The credit card issuer has to send you a letter explaining why you were denied credit, and what credit report was used when making the decision. Once you know why you were denied, you can write in for a free copy of your credit report. Look at your report, and at the adverse action letter, and determine how you can improve your credit score so that you are approved for a credit card next time you apply. Create a plan to address the issue, and then spend the next three to nine months working on it.

If your credit application was declined because of an inaccuracy on your credit report, you can dispute the information and let the issuer or lender know. In some cases, especially if you are applying for credit at a local financial institution, being able to talk to someone about the situation can lead to the approval of an application that was originally denied. However, in most situations you will be required to dispute the inaccuracy with the credit bureaus.

Apply for Less Demanding Credit Cards

Sometimes, a department store credit card will approve you – even if your credit is less than desirable. However, you have to be prepared for a low credit limit, and a high interest rate. Try to avoid carrying a balance, and use it to build up your credit so you can try again for a better credit card after a few months. If your credit needs fixing, or if your credit history is insufficient, you can apply for a secured credit card.

Secured cards generally require you to pay a security deposit, and can come with other fees and a relatively high interest rate. However, if you are careful, and if you show that you are responsible, you can eventually get to the point where you can apply for a more desirable credit card, and enjoy a higher credit limit, a lower interest rate, and other perks such as rewards.

Bottom Line

In most cases, you are denied credit because of something in your credit history. If you want to be approved later, you will need to make a plan to fix your credit now. Find out what is amiss in your credit file, and make improvements. Then, you will be more likely to be approved next time.