It is never fun to have a credit card application declined. You might feel shame. You might feel frustration. Regardless of the emotion, it's not a fun experience. It's important not to let that emotion get the best of you. The decision of the bank, after all, is a business decision – not a personal one.
Don't take the rejection as a call to instantly apply for more credit cards. That'll only impact your credit score. You need to look at the options you do have available which, in some instances, will allow you to still get the card in question.
Why Was Your Application Denied?
The first step to take after having a credit card application denied is to figure out why your application was rejected. This is not difficult to do. Thanks to the Fair Credit Reporting Act the issuing bank is required to provide an exact reason for the rejection. You must ask for this letter within 60 days of the application.
There are several reasons why a credit card application can be declined, such as:
- Too low of a credit score
- Too low of an income
- You applied for the exact same card recently
- You do not have a job
- This is your first credit card
The exact reason your credit card application is denied will be outlined in the letter. If it's something you can improve you should focus on that. That being said, you may have options available to you to still get the card.
Options to Pursue if Your Credit Card Application Is Declined
There is good news. In some instances, you may be able to get the credit card after your initial application is denied. There are two key times when that is possible. Those instances are:
Calling a reconsideration line
Many issuing banks have reconsideration departments. These departments will look at your situation and have the power to approve your application. This is the opportunity to state your case to the bank. Do you have a good history with the bank? Have you always made your payments on time? Do you have a 'good,' or 'better,' credit score? This is information you want to know and communicate to your bank. If you are polite and have a good case, they can and should approve your credit card. It's important to point out that these are case-by-case situations, and not a guarantee.
Correcting an error
Credit card applications ask for a lot of information. Incorrect or missing information can lead to a denial of credit. "If the declination reasons relate to missing or incorrect information, the person can provide the correct answers," says Kevin Haney of Savvy On Credit and former Executive at a Credit Bureau. Haney adds that if you correct the missing or erroneous information it can lead to an approval. If you provided incorrect information or overlooked an item, contact the bank as it can lead to a rejection being overturned.
Outside the above two options, you may have no other way to get the credit card. You can consider applying for a second credit card. Haney adds, "People can always apply for another account with a different issuer. Every bank uses unique underwriting criteria. If one bank declines a person, another may accept him or her. Use the information from the declination letter to clean up your profile before applying at a second issuer." If the declination was due to something that can't immediately be rectified, your final option may be applying for a secured credit card. A secured credit card is backed by funds you have on deposit with a bank, though it allows you to begin to establish a strong credit history.
Overturning a credit application declination is possible, though not in every circumstance. If you were able to have it overturned, great! You can begin enjoying the benefits of the new card.
If you can't get the credit card at this time, focus on the reason for denial and improve it. Let the declination letter guide your approach to gaining credit elsewhere. It may mean finding ways to improve your credit score or starting with a secured credit card. Again, banks make business decisions, not personal ones. Improve what they highlighted and you will be on your way to getting that new credit card.
Having a credit card application declined is not the worst thing in the world. It may feel that way, but remember that you have options. Focus your attention on what you can change and you may very well get that card.