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Woman wondering what to do after credit card application was declined

My Credit Card Application Was Declined: What Can I Do?

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.

Step 1: Find out why you were denied and address it

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.

You have not established enough credit history

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:

  • Apply for a student card.
  • Apply for a store card.
  • Ask a family member or friend to name you an authorized user of their account, so you can ride on their credit history while developing your credit history.
  • Apply for a personal loan.

You have a low credit score

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.

Credit scores can be affected by late payments. 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. If you have unpaid balances on your other cards, consider debt consolidation.

You have been applying to too many credit cards at the same time

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.

You don't meet employment or income requirements

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.

Step 2: Ask for your credit report

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.  

Step 3: Consider other types of loans for your needs

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? Do you want the peace of mind of having a line of credit to borrow money whenever you need it?

There are other ways of achieving this financial goal, and you can find them all at Simple Fast Loans. You can avail yourself of three different kinds of loans:

  • Personal loans. 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.
  • Installment Loans. Installment loans allow you to borrow larger amounts of money and then pay it off over several months.
  • Lines of Credit. This is very similar to a credit card. You can borrow any amount anytime if it's within your credit limit. You are only charged interest on what you borrow. When you pay it off, you can access the total credit limit whenever you need it.

Step 4: Get the Simple and Fast Loan

You can wallow 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, you can start building your credit history and raising your score.

Contact Simple Fast Loans and take the first step towards stronger financial health.

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