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If a credit card company denies your application, don't just tear up the rejection letter and wallow. Instead, this is an opportunity to find out more about your credit history, take action to fix it, and look for other alternatives. In other words, this can be a step towards better financial health.
Here's what you can do when your credit card application is denied, so you can move forward and take charge of your finances.
Treat a credit card denial like a blood test with irregular findings. You didn't get the results you were hoping for, but now you can diagnose the problem and solve it.
Credit cards usually send an "adverse action notice" that lists one or two reasons for the denial. These are the most common reasons and what you can do right now to improve your chances for credit card approval in the future.
This can happen if this is the first time you have applied for credit. Many big card companies will only approve an application if they know you've taken out other credit and paid it off on time.
Solution: You must apply for other cards or loans with less restrictive requirements to fix this. You can try to:
This is the most significant factor for credit card approval, especially since card companies are jittery because of the economic recession. Many companies require a score of at least 700 for regular cards and 750 for cards with special rewards.
Late payments can have an impact on credit scores. Missing a bill by a few days won't hurt your score, but if you have records of bills being over 30 days late, or your account being sent to a collection agency, this can stay on your credit report for up to 7 years.
Solution: Improve your track record by paying current bills on time. Set up notifications on your phone or arrange for payments to be automatically deducted from your account.
Credit card bureaus will monitor the number of hard inquiries on your score. For them, you're trying to raise a lot of money, which indicates possible financial hardship.
Solution: If you're going to apply for a card or a loan, it's best to choose the best package for your current situation instead of blindly applying for as many as possible and hoping that at least one gets approved.
Credit card companies have pretty narrow definitions of what counts as "regular income." They typically look for applicants who have worked for an established company for at least six months, with a regular position, a monthly salary, and no history of employment gaps.
So even if you have a good source of income as a freelancer from several part-time jobs, or if you have just recently been hired after taking some time off, you'll be denied.
Solution: Not all lenders will look at employment or income as criteria for approval. You can apply for a personal loan and show you make payments on time. This will raise your overall credit score and make it more likely that you will be approved for a credit card, even if you have a "non-traditional" source of income.
Credit card companies will only give general reasons in their adverse action notice. Get a copy of your credit report to get a clearer, more complete view of your credit history. You are entitled to a free copy of your credit report every year. Just go to AnnualCreditReport.com and fill out the online request form.
Why were you applying for a credit card? Do you need it to pay for an urgent emergency expense or allow you to pay for a big, significant purchase in installments?
There are other ways of achieving this financial goal, and you can find them all at Simple Fast Loans by taking out a personal loan.
If you are not familiar, a personal loan is a fixed amount of money you borrow for a specific financial need. This includes medical bills, house or car repairs, rent, utilities, etc.
You can fumble over a credit card application or move on and look for an alternative.
With Simple Fast Loans, you complete the online form and submit a few documents. Immediately, you will get a reply verifying your eligibility and the amount you qualify for. In addition, a customer service representative is always on hand to answer your questions and guide you through the process.
It only takes a few minutes to start your application, and the efficient loan process means you can get your loan approved in just a few days. So now that you have the money for emergency expenses, get your life back on track!
Contact Simple Fast Loans and take the first step towards stronger financial health.
Browse through the Blog to read articles and tips on managing debt, improving your credit and saving more money!
