Steps To Do When Your Credit Card Application Gets Denied

Credit cards are accessible. It allows you to enjoy perks from the promo, cashback, free accommodations to hotels, and many more. You wanted this so bad but not all people will get approved. If you apply and get denied, don’t worry. There are some ways you can do it if your credit card application gets denied.

10 Reasons for Denied Credit Card Applications

Here are some reasons why you got rejected.

1. Low Credit Score

Creditors use a different way of measuring your credit score. A good credit score is 670 FICO score, based on FICO. If you are targeting to get top-rated rewards, you have to get a better credit score. Top rewards depend on the credit card that you can get. There are rewards that could offer you two points for every dollar for travel credit cards. _¹

2. Limited Credit History

The lender will not approve you if you have limited use of your credit. This is their reference if you are a customer with a good reputation and whatnot. Have you considered applying for credit cards for people without credit history? We call it a retail store card or a secured credit card. It can be an option to build your credit score.

3. Insufficient Income

Lenders can approve you if you can show that you have the ability to pay through your income. Let them know that you can pay so they can earn from you. Does it make sense?

4. Late Payment History

FICO score is based on your history of payment. Paying late or having missed payment in a month or 30 days will show a bad credit score on your part. You can rebuild your credit score.

5. High Debt

You will have to keep up with your payments monthly. As a result, some payments would be late and that could hurt your credit score so badly. Consider paying down your existing bills before applying again.

6. You’re Too Young

You should be 18 years of age when you apply for your own credit card. You can ask your parents to allow you as a user to use one.

7. Frozen Credit Report

Credit reports show the ability of the credit card applicant to pay. The issuers of credit cards will use this reference to your qualification to open an account. Accounts are frozen because of reasons like malicious activity or hacked accounts. This is to ensure that you are safe.

8. Bankruptcy

Think twice before you file for bankruptcy again, this will affect your FICO score. The decisions of credit card issuers are based on your payment history. Bankruptcy will say to them that you didn’t pay your debt as what you have agreed upon. Good news! You won’t be in bankruptcy for too long, it can be discharged. You can apply again after filing for bankruptcy but you will be paying higher interest for that. Do you want that? Of course not, right?

9. Too Many Recent Credit Inquiries

Credit inquiries may also affect your credit score. These many inquiries in a short time show your difficulty in managing your debts. No worries! Reports on credit inquiry remain for 2 years. You are off the bat after that.

10. You Didn’t Fill Out The Form Correctly

We are only humans and we make mistakes. One of these is filling out forms. No worries! If you accidentally entered the wrong information, request the card issuer to reconsider your application.

Things to Do to Solve Your Denied Credit Card Application

There are different ways to solve credit card application denial. Normally the credit card issuers will reply to you with a letter within 7 to 10 days. The company will state the reasons why you are denied. Read their letter so you will figure out your next steps. Here are the things that you do.

Sit and Wait

When you apply for a credit card, wait if you are approved or denied. Remember, many inquiries can hurt your credit score. When you apply with many credit card companies, it will show that you are desperate to get one.

Read The Adverse Action Letter

Read the letter that the credit card sent you if you were denied. They have 30 days to respond to your application. In that letter, they will write down the reason for your application denial. The reasons can be your late payments made recently, credit card balance, or credit report. The issuers will give you a copy of your credit score if you were denied because of it. Make sure that you have checked your credit score report for some given reason, it can be inaccurate.

Credit Report Request

You have 60 days to request a copy of your credit report if you were denied because of your credit report. Update your credit score and make sure that it is correct. You can ask the credit card issuer to review your credit score again afterward.

Review

Banks are required now to send a credit score report for free if this is the reason for your denial. Here the factors that affect your credit score are listed, for example, high balances.

Repair

Check for your unpaid collections, inability to pay, and credit balances that are high. You can fix bad credit when you pay your dues, don’t apply for many credit cards, check errors, and file disputes.

Get A Retail Store Card

It is easier to get a retail store card, even if your credit score is a lot. You can use this to rebuild your credit score. It would take longer to fix your credit score but this can be a start. Make a habit of purchasing the least items and paying them in full so you won’t pay for high finance charges.

Have A Secured Credit Card

One option is to get a secured credit card. This card may need you to pay an upfront fee as a security deposit. This will be deposited into your savings account. After 12 months, the credit card company can convert this to an unsecured card. Your security deposit will be returned to you. You are qualified to apply for a regular credit card even if it is not converted yet. Of course, you use this card.

Don’t Worry!

It is confusing for you if you get denied when you apply for your credit card. There are different ways to fix your denied credit card application with these resources. Plan ahead and be approved. Imagine the perks that you will get when you own a credit card! Choose the best credit card that will suit your lifestyle.

Be responsible for your credit score and your spending. Get what you are able to pay for and pay your fees in full to avail of great rewards from them. Pay attention to your financial statement because a credit score is very important.

Reference:
_¹ US News / What Credit Score Do I Need to Get the Best Rewards Cards?