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What should you do after your credit card application is denied?

9 experts weigh in on your next move after application rejection.

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Applying for a new credit card can be overwhelming, and getting denied for one can feel even worse. While knowing the reason as to why your credit card application was denied is important, knowing what to do after can be just as vital. More than 41% of Americans are experiencing pandemic-related financial anxiety, according to a June 2020 survey from U.S. News & World Report and are unsure of how to cope. Finder asked several experts to share their insights on pivoting towards success after credit card applications are rejected.

What our expert panelists had to say

Steven Dashiell headshot
Steven Dashiell
Credit cards writer, Finder.com

Is there a type of credit card that has a higher rejection rate?

“Generally speaking, all credit card providers vet applicants based on the same primary factor: your credit score. The better a card’s features, rates and fees, the more likely it is you’ll need a high credit score to qualify. So rejection rates have less to do with the card type and more to do with the card quality.

Of course, some types of credit cards have a wider variety of premium options – travel and reward cards for example. You’re much more likely to run into a credit card with stiffer credit score requirements in these categories.”

Ben Reynolds headshot
Ben Reynolds
CEO & Founder, Sure Dividend

What should you do after your credit card application is denied?

“If your credit card application is denied there are several actions you should take. First, read the letter that they sent you explaining why your app was denied. If your credit use is too high, then pay down some of your balances before reapplying.

Resist the urge to keep applying for other cards. Inquiries show on your credit report and too many in too short an amount of time will damage your F.I.C.O. score making it even harder to get the credit you need.

Follow the directions in the letter to get a copy of your credit report. You can get a free one within 60 days of being denied credit.

If there are errors on your credit report, you need to dispute them. Pay off any old debts that you had forgotten about as soon as possible.”

Matt Frankel headshot
Matt Frankel
Certified financial planner and investment advisor, The Ascent

What’s the biggest mistake people make when applying for a credit card?

What would be your main piece of advice to those who are denied for a credit card application?

“Be realistic about the credit cards you can qualify for. If you have a credit score in the low 600s, you could be approved for certain credit cards, but the best offers are likely to be out of reach.”

“The most important thing is to figure out why you were denied — which the credit card company is legally required to tell you — and take steps to address the problem. If your debts are too high, make a plan to pay them down. If your credit score is too low, take steps to build it up. And if you were denied for making too many applications in a short time, wait a while before you reapply.”

Sam Hawrylack headshot
Sam Hawrylack
Personal Finance Expert and Co-Founder, How to FIRE

What should you do after your credit card application is denied?

“It’s important to take advantage of your adverse action notice, or the report stating why you were denied. If you were denied based on inaccurate information, you can appeal the rejection. You may have been denied based on bad credit or even an accumulation of high balances, low income, short credit history, or too many credit cards or inquiries. Use this information to improve your application and then reapply.”

Dusan Stanar headshot
Dusan Stanar
Founder, VSS Monitoring

Does getting denied a credit card hurt your score?

How long should you wait to apply for a credit card again?

“I worked at a bank as a Fraud Security Analyst and often worked with the departments handling credit card applications. Getting denied doesn’t hurt your credit any more than getting accepted. It’s a hard check when you apply either way and whether you are accepted or denied you will lose a few points. Ideally, you want to wait anywhere between 3-6 months to reapply. How long depends on your credit score – the higher it is the less time you should wait.

For example, if you have a score of 500 you’ll want to wait closer to 6 months or even a little more to be safe. There is no risk of appealing your credit card application. You can do so if you really want to be accepted, but credit card companies are legally required to provide a reason. Don’t blindly appeal any application you are denied from, but think if your application really deserves a second chance and can overcome the initial rejection reason.

My biggest piece of advice to be more likely accepted is in the area of answering about your income. While employment and “side hustle” income is often included, you can also include income you get from investments (stocks, real estate, etc). as this is part of your income.”

Camilo Maldonado headshot
Camilo Maldonado
Personal finance expert and co-founder, The Finance Twins

What should you do after your credit card application is denied?

Is there a type of credit card that has a higher rejection rate?

“If you get rejected and feel that you were a good candidate, you might have just been the victim of tighter lending practices, or the card you applied for was just out of reach for you. In general, the most sought after rewards cards are going to be harder to be approved for. If you aren’t sure if the card you want is hard to be approved for you can use the annual fee as a hint. The higher the annual fee, the more qualified you’ll need to be in order to be approved. It’s not a perfect rule, but it’s a good approximation.

That means you’ll want to focus on cards with no annual fees first. If you have no credit history at all, you’ll want to focus on secured cards. Secured cards are best for those with no or poor credit history because you have to provide cash as collateral so that the bank feels comfortable extending you credit.”

Richard Best headshot
Richard Best
Personal finance expert, Don’t Pay Full

What should you do after your credit card application is denied?

“Clean up your credit report. You can obtain free copies of your credit report from each of the credit bureaus. By law each is required to provide you one free report each year. Your best course is to order one from each at three different times during the year so you can check them for changes in your credit history. Check your credit report for errors and omissions. It’s not uncommon for the credit bureaus to report erroneous information or omit payments. They are required to correct errors and omissions quickly. It is imperative that you do this before applying for a credit card.”

Jarod Weitz headshot
Jared Weitz
CEO, United Capital Source

What’s the biggest mistake people make when applying for a credit card?

“With all the different credit card offers out there, it’s easy to get sidetracked from the credit card agreement’s actual terms. You’ll see signup bonuses like 0% intro balance transfer & purchase rates, many points to use at the onset, and several other perks to make the card more attractive. However, a big mistake when applying for these cards is not knowing what you’re getting into in terms of rates, fees, late payments, default rates, annual fees, etc. Not knowing the terms of the card when you apply could lead to paying a higher cost for borrowed funds and, even worse, lead to late payments from non-payment of annual fees you didn’t know existed. Take an extra 5-10 minutes and get acquainted with the terms while you apply, and you’ll be able to navigate and take advantage of the best perks of the cards you’ve applied to use.”

Todd Christensen headshot
Todd Christensen
Education manager, Money Fit

Should I ever appeal my credit card application rejection?

“Ask the creditor which consumer reporting agency (CRA, aka credit bureau) reports they used as the basis for their decision. You have a legal right to get a free copy of your credit report directly from the CRA (Equifax.com, Experian.com, TransUnion.com). If you find errors on your report, dispute them directly through the CRA. Once the errors have been corrected, contact the creditor and explain the situation, asking them to reconsider your application.”

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