What to Do If Your Credit Card Application Was Rejected

A credit card denial may seem like a test failure, but it usually means that your current income and credit profile should be matched against the card that suits you best. If this happens to you, you are not alone either: according to the latest figures from the Federal Reserve Bank of New York, approximately 15% of credit card applicants are rejected. Here are a few steps you can take to successfully obtain this new card.

Find out why you were refused

The first step is to review your disclaimer notice. Card issuers are required by law to tell you the reason your application was rejected. This “adverse action notice” must be sent to you by the credit card company within 7-10 days.

The most common reasons will be:

  • bad or limited credit history
  • low income
  • delays or unpaid debt payments
  • have too many credit cards
  • bankruptcy and foreclosures
  • Employment history
  • be between the ages of 18 and 21

Review your credit history

If you are denied because of your credit rating, you have the right to request a free copy of the credit report used by the lender within 60 days. Review the report and look for errors. If you believe your refusal was based on inaccuracy, you can challenge the charges with the Bureau.

See if your application can be revised

If you are dealing with a large lender, you have the option to call their reconsideration line , which will connect you to a company representative who can potentially reverse the waiver. There are no guarantees, but if you act as a responsible prospect, they can be sure. May be. If that fails, your next option is to improve your credit score.

Improving your credit score

The fastest way to improve your credit score is to pay off your existing credit accounts. Make payments on time, pay off balances, and avoid making the most of your credit cards (ideally the remaining 30% below your total credit limit). If you are having trouble paying off your credit card balance, consider transferring your balance to a card with a 0% annual interest rate if possible so that you at least stop charging interest while you deal with your debts.

If you have a limited credit history, other tips for building credit include asking the landlord to report your rent payments or adding yourself as an “authorized user” to an existing account (many young people “shift” on to their parent’s credit, as an example ).

And sometimes you just have to wait. “Hard Requests” – requests originating from applications for new lines of credit – last two years , and receiving more than five requests at the same time negatively affects your credit rating. Lenders get nervous if you open too many credit cards at the same time.

Find Credit Cards That Are Right For You

Failure to receive a particular card does not prevent you from applying for other cards. Once you know your credit score, either from the adverse action letter or directly from the credit bureaus, you can look for credit cards that serve users within your range. A high tier card (such as Chase Sapphire Reserve or Capital One Venture) is likely to remain elusive until your income increases or your credit rating is typically excellent or above 720. Most people fall within the credit range “Good” (690-719) or “Satisfactory” (630-689). You can still get a wide variety of cards in these ranges, but they will generally have lower credit limits (often $ 1,500 to $ 5,000), a higher annual rate (over 22%), and won’t offer many of the higher tier benefits. … postcards. On the other hand, most of these cards do not have an annual fee.

If you have bad credit (score below 629), you can look into a secured credit card . This card may not be perceived as a “credit” card as it requires a security deposit equal to your spending limit. But remember, transactions using these cards will be your first step towards improving your credit score (which usually takes at least six months). Good examples include Capital One Secured Mastercard, Credit One Bank Visa, Discover It Secured, and Open Sky Secured Visa.

If your credit card has been denied, it’s time to suspend, evaluate and reinstate. It may take a while, but if you make a plan and stick to it, you will have the credit rating (and card) that you strive for. This post has been updated to include more recent data and information.

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