What to Do If You Get Rejected for a Credit Card?

Getting denied for a credit card does not technically hurt your score but even worse it could leave you feeling defeated. What is actually hurting your score is an abundance of hard and soft inquiries and the actually application for credit, the rejection itself has no bearing on your score. When lenders view your recent inquiries, this is generally looked down upon and all the inquiries can ding your credit score.

Pro Tip: Try to keep total credit inquiries to 2 per year or less.

You should typically wait at least 6 months or longer before applying for another line of credit after a rejection. This is general a safe rule of thumb to follow and will help you prepare for the next credit application while also keeping your average to 2 credit pulls per year.

Are There Credit Brackets and Different Ranges of Credit Limits?

Yes, there are an abundance of “higher credit” credit cards in the market today. The rule of thumb is usually to apply for the credit card that offer the most benefits within your “credit bracket”.

Lenders are Required by Law to Let You Know Why You Were Rejected?

Yes! By law lenders are required to let you know why you were rejected for the line of credit. Lenders are required to send you a copy of the credit report they used and the reason for the rejection within 60 days of the request. Moreover, appealing the decision will give you the benefit of knowing where you went wrong and what issues creditors see with your credit worthiness. So, this will definitely give you a better idea of how to get approved next time you apply.

Can You Appeal Credit Rejections?

There is no risk for appealing a credit rejection, however the likelihood of it being reversed is extremely low. The benefit of this is that you will at least know why you were rejected if you follow up.

Common Credit Mistakes

The biggest mistake most people make is that they continually try to get new credit extensions after a rejection. This shows a dependency and high reliance on revolving credit and will continue to negatively impact your score. Another common mistake is that people applying for credit cards do not check the average credit score for the card they are applying for. If you apply a credit card that’s out of you range you’re much more likely to get rejected.

Make sure you understand what range of credit cards you are likely to get approved for—based on your credit score and credit history. If you have a 650 credit score you are unlikely to get approved for a top shelf credit card. Do not apply for those cards until your score improves and stick to cards that get approved within your credit bracket.

More advice: If you were recently got rejected for a card, look to see why you were rejected and try to resolve the issue before applying again. This could mean lowering your utilization rate, fixing inaccuracies on your credit report, too many inquiries, income related rejections, etc.

Remember, keep the hard inquiries to a minimum! Keep inquiries to 2 a year or less.