What to do when rejected for a credit card?

What should you do when rejected for a credit card? Have you applied for a credit card and got rejected? If so, you have come to the right place.

There are chances that your credit card application will be rejected. It is not the end of the world. However, the action you take after the rejection can determine the direction of your financial journey.

In this article, I will give your proper steps you can take after your credit card application is rejected.

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Tip 1: Do not apply for another credit card right away

The first thing to do when you are rejected for a credit card is to avoid submitting another credit card application right away. This is because the reason you been rejected is still there.

If you apply for the same or another credit card right away, there are high chance that you will be rejected again.

These rejections will not look good on your credit report.

Every time you apply for a credit card, you will end up with a hard inquiry on your credit report. Each hard inquiry will reduce your credit score by 5-10 points. This is the main reason you should not apply for another credit card right away.

Instead, figure out why you have been denied and see if there is something you can do about it.

Tip 2: Call the credit card issuer to see why you got denied

After receiving a denial letter, call the credit card provider and ask them why your application has been denied. You can use their customer service number to speak with a representative.

If you are using an in-person bank, ask them why you are being denied right away. There are many reasons, you could be denied.

The bank will tell you the actual reason your application was rejected and give you advice on what you need to do in order to qualify next time.

Tip 3: Act according to information your credit issuer gave you

After receiving information about why you have been denied, you must fix the issue.

For example, they may tell you that you don’t have enough credit history. If this is the case, build your credit before you apply for another credit card.

Tip 4: Improve your credit score

One of the main reasons you will be denied is because you have a bad credit score. If this is the case for you, you will need to improve your credit score and get it into acceptable ranges.

In general, you need a good credit score in order for your application to be accepted. Follow these 8 tips you can use to improve your credit score.

Once you have improved your credit score, you can submit your application again. You can use the following related articles to educate yourself about credit cards and credit score ranges.

Tip 5: Try a different credit card that you are qualified for

There is a possibility that you have been denied because you applied for a credit card you are not qualified for. In this case, do more research and find a credit card that you are qualified for and submit an application for it.

Make sure that you meet all qualification requirements before you send in your application. Otherwise, you will be denied again and your credit score will slide due to a hard inquiry on your report.

Tip 6: Use credit card alternatives

Depending on the reasons you are looking for a credit card, you can always use alternatives.

For example, let’s assume that you wanted a credit card to help you make a big purchase. Since you have been denied for the card, you can apply for a loan. Keep in mind that the creditor will most likely run a hard pull on your report which will result in a hard inquiry on your credit report.

What if you have been denied because you are under 21 or have a very bad credit that will take a while to build?

If this is the case, you can build your credit without getting a credit card by becoming an authorized user.

To become an authorized user, you will need to be added to an existing credit card account from another person. For example, if you are under 21, your parents can add you to their accounts. This will give you access to their credit card accounts.

You will use their accounts and make payments if you want to. This is a good technique you can use to build your credit without having a credit card.

What happens to my credit score if I am denied for a credit card?

When you apply for a credit card, the issuer will most likely run a hard pull on your credit report. This will give them access to your credit profile which will be used to assess your creditworthiness. For example, the lender will need to know if you pay your bills on time or whether you recently had a foreclosure or bankruptcy.

A hard inquiry does not look good from the lenders’ perspective.

Hard inquiries will directly affect your credit score. You will lose between 5-10 points from a hard inquiry and it will stay on your credit report for 24 months. However, a hard inquiry will not affect your credit score after 12 months.

Tip: Do not apply for many credit cards at once to avoid an accumulation of hard inquiries on your report and wreck your credit score.