What Can You Do When You've Been Denied for a Credit Card?

If you’ve been denied for a credit card, it may feel like your financial world is crashing down. Don’t fret! Here are tips for how to handle a credit card denial.

Rejection hurts no matter what the situation, but when it comes to our credit, it seems to feel personal. We feel as though we've been judged as unworthy and that can make it seem as though we are unwanted. A credit card application denial is not a personal attack, but it is a reflection of what is found on your credit report.

Luckily, there are a bunch of things you can do after being denied that will lead to success in the future. First, we must determine why you were denied and start from there.

Read The Rejection Letter

According to Federal law in the United States, if you are rejected when applying for credit, the issuer of the credit must inform you how they came to that decision. You will receive a letter that should break down what issues they have with your credit and the reason for denial. This is your opportunity to figure what happened.

This will also be your opportunity to correct what went wrong. If the letter states that you have too many outstanding accounts, it means that your other lines of credit are too close to their limits relative to your income. You will need to pay down those balances to be considered for new accounts. Being rejected shouldn't hurt your credit very much. You'll just have a small hit when applying for new credit.

Fix The Issues

There are many issues that could arise on credit reports like bankruptcy, delinquency of payments, or collection accounts. Fixing each issue has a different approach, here are some examples:

  • Bankruptcy: Time after discharge of the bankruptcy is necessary to begin the rebuilding process. To fully recover, it may take 7-10 years.
  • Delinquency: Having late payments on your credit report will almost assuredly bar you from new credit. Make sure that all of your accounts are fully caught up to date.
  • Collection Accounts: If those past due balances got away from you a bit, they will go into a collection status. These need to be caught up or paid off.

This is only a small sample of some of the things that will affect your credit score and possibly get you a denial. Stay on top of your credit report and make sure anything negative is taken care of as soon as possible.

Give It Some Time

With time, all things can be corrected and applying for credit will be a better experience. By knowing what is on your credit report, and fixing any issues, you can avoid another credit card denial.

It never feels good to be rejected, but rest assured almost anything can be corrected. Once the problems are corrected, hopefully, you'll never have to see a rejection letter again.

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