What to do if your credit card application was rejected

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Being denied a credit card can feel like you’re failing a test, but it usually just means that your current income and credit profile need to be matched with a card that’s better for you. If this happens to you, you’re not alone either: about 15% of credit card applicants are rejected, according to the most popular Federal Reserve Bank of New York. recent data. Here are some steps you can take to successfully get this new card.

Find out why you were rejected

The first step is to review your denial notice. By law, card issuers must give you a reason why your application was rejected. This “notice of adverse action” must be mailed to you within 7-10 days by the credit card company.

The most common reasons will be:

  • bad or limited credit history
  • low income
  • unpaid or unpaid
  • have too many credit cards
  • bankruptcies and foreclosures
  • employment history
  • be between 18 and 21 years old

Take a look at your credit history

If you are rejected 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. Examine the report and look for errors. If you believe your refusal was based on an inaccuracy, you can contestation the costs with the office.

See if your request can be reconsidered

If you are dealing with a large lender, you have the option of calling their review line, which puts you in touch with a representative of the company who could potentially reverse the rejection. There are no guarantees, but if you make your case as a responsible prospect, they might be convinced. May be. If that fails, your next option is to improve your credit score.

Improve your credit rating

The fastest way to improve your credit score is to pay off debts on your existing credit accounts. Make payments on time, pay off balances, and avoid maxing out your credit cards (it’s ideal to stay 30% below your overall credit limit). If you’re having trouble paying off a credit card balance, consider transfer your balance to a 0% APR card if possible, so that you at least stop earning interest while you get your debt under control.

If you have a limited credit history, other construction credit tips include asking your landlord to report your rent payments Where by adding yourself as an “authorized user” under an existing account (many young people “graft themselves” onto their parents’ credit, for example).

And sometimes you just have to wait. “Serious investigations” —requests for information arising from requests for new lines of credit—last two years, and having more than five inquiries at a time negatively affects your credit score. Creditors get nervous if you open too many credit cards at once.

Find the right credit cards for you

Rejecting a particular card does not prevent you from requesting other cards. Once you know your credit score, either from your adverse action letter or by looking at it directly Through the credit bureaus, you can search for credit cards that cater to users in your range.

A high tier card (like Chase Sapphire Reserve or Capital One Venture) will likely remain elusive until your income increases or your credit rating is generally in the “excellent” level, or above 720. Most people are in the “Good” (690 to 719) or “Fair” (630 to 689) credit range. In these ranges, you can still get a wide variety of cards, but they will usually have lower credit limits (often $ 1,500 to $ 5,000), high APR (over 22%), and won’t offer many of the benefits of the higher level. cards. On the plus side, most of these cards don’t have an annual fee.

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

If you’re rejected for a credit card, it’s time to take a break, assess, and rebuild. It may take a while, but if you make a plan and stick to it, you’ll have the credit score (and card) you’re aiming for.

This post has been updated to include more recent data and new information.

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