5 Steps To Take After Credit Card Rejection

Improve the Odds of Being Accepted for Your Next Credit Card

5 Steps To Take After Credit Card Rejection
December 21, 2016

Nobody likes rejection in any form, but when faced with rejection, it is important not to give up. That is especially true when your rejection is in the form of a denied credit card application.

Anyone can rebound and be approved for a credit card, if he or she is willing to take the necessary steps to rebuild credit. Consider these five steps as you start on your journey toward credit card acceptance.

1. Double Check the Application – Did you make a simple mistake on your application, such as adding or leaving out a zero, or putting information on the wrong line? In that case, you should be able to correct the application and clear up the problem relatively easily.

2. Find Out Why You Were Rejected – Start by reviewing the reason for your rejection. If the rejection was due to any information in your credit report, issuers are required by the Fair Credit Reporting Act to give you the reason why through an adverse action notice. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. Even if the reason is outside the view of the credit report — for example, lack of steady income — card issuers will typically let you know why you were rejected.

Do not take it personally. Take the rejection as a blueprint for future action to improve your credit standing.

3. Review Your Credit Report – Even if your credit report was not the reason for your rejection, it is wise to check your credit reports with the three major credit bureaus (Equifax, TransUnion, and Experian). Look over each report for reporting errors and analyze the weak spots in your credit history.

We suggest getting all three reports, because not all data is reported to all three agencies and one agency may have a mistake that the other two do not show. You can get all three reports easily via Credit Manager by MoneyTips.

4. Reconsider Your Choice of Credit Card – Did you try to "punch above your weight" and apply for a credit card that has strict requirements? You may want to look for credit cards that have less stringent qualification criteria, although there will be a tradeoff of some kind such as higher interest rates, more fees, or limitations of use.

If you are being rejected for cards that have relatively loose standards, try building your credit first by using a secured credit card that is backed by a cash deposit. Many such cards offer a path to a traditional credit card over time if you regularly make your payments and show responsible credit behavior with the secured card.

5. Be More Fiscally Responsible – Now that you have a clear picture of your credit history and a target to work toward, start applying the necessary fiscal discipline. Make sure that all bills are paid on time with at least the minimum payment. Keep your credit utilization (the amount of credit you use compared to your total available credit) reasonably low. Apply any extra funds toward paying down your highest-interest rate debt. Most important of all, use a budget to keep your spending under control.

After applying these steps, you should be on your way toward good credit and a well-deserved credit card. Once you have a credit card, be sure to use it wisely and maintain good credit habits. Otherwise, you will once again be dealing with credit rejection — but at least this time you will know the reason why.

If you want more credit, check out MoneyTips' list of credit card offers.

Photo ©iStockphoto.com/KLH49

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Brittany | 12.20.16 @ 17:29
I have been considering the possibility of getting my first credit card, so this is a great article with wonderful tips for when I do go forward to doing so. I don't want to end up messing myself over in the long run.
Nancy | 12.20.16 @ 18:02
I think the 2 most effective things would be to check you credit report for errors and if there are none, become more fiscally responsible to avoid declines in the future.
Zanna | 12.20.16 @ 18:59
This will be helpful information for my son as he gets ready to apply for his first credit card!
Chrisitna | 12.20.16 @ 19:16
My daughter has been trying to get her first credit card and has gotten rejected due to lack of credit history. It's so hard to start building credit when no one wants to give you a first chance! Maybe some of these tips will help her :).
ian | 12.22.16 @ 12:14
The instructions given by the article provides consumers with a good starting point. That said, consumers should be aware that creditors (like banks and credit card issuers) do not have to provide the reasons why they have declined a credit application at the time of rejection. They must provide either the reasons for the denial or a notice of the consumer's right to the reasons. If the creditor has not provided the reasons for the denial, the consumer can get the reasons for denial by writing to the credit promptly after receiving a rejection notice. Additionally, consumers should be aware that there may be other credit reporting agencies that provide data to banks and credit companies. They should read any notices provided with the rejection and make sure to order any credit reports that appear in the rejection notice. Errors in credit reports can arise from simple mistakes, as well as more serious problems like identity thefts and mixed credit files. Consumers who anticipate applying for credit or a job should check their reports before they apply to avoid a rejection.
$commenter.renderDisplayableName() | 12.02.20 @ 16:56