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What to do if your application for a secured credit card is denied

You have several options to work toward secured card eligibility.

Getting denied for a secured credit card doesn’t feel great, especially if you’ve recently been rejected for an unsecured card. Your application may have been denied for a handful of reasons, so it’s best to first identify why you were denied. Then, you can take action to remedy the situation before your next application. Here’s how you can get back on track toward opening a new secured credit card.

Why your secured credit card application might have been denied

You’re legally entitled to know exactly why your application was rejected. Within seven to 10 days of a rejected application, you should receive an adverse action letter from the issuer, which explains the reasoning behind your denial. This letter is the key to understanding exactly why you were denied, as you can use it to make changes that will increase your chances of approval.

While there are many reasons why your application could have been denied, here are a few of the most common causes:

  • Poor credit score. Credit card issuers often require a minimum credit score to verify your ability to pay your bills.
  • Outstanding loans. Outstanding loans may be a sign that you are unable to pay off debts, which can be a red flag to some issuers.
  • A history of inadequate income, missed payments or bankruptcy. Issuers want to make sure you’re able to pay your bill. If you have inadequate income or you have a bankruptcy on your history, they may doubt that ability.
  • Spotty employment history. Just like inadequate income, a spotty employment history may be seen as a sign that you’re unable to pay your bill.
  • Error on your application. This could be as minor as a spelling error or a wrong phone number. Always check to make sure all of your information is correct before submitting your application.
  • Error on your credit report. Your application may also be rejected due to errors on your credit report, which can be resolved by contacting the relevant credit bureau.
  • Security deposit. Sometimes, the reason for a denied application may prove as simple as failure to pay the security deposit.
  • Too many applications or inquiries. Too many credit card applications or inquiries in a short period can decrease your credit score or indicate that you are relying too heavily on credit.
  • Credit card is not eligible in your state. Every state has different laws and regulations surrounding credit cards, meaning that not all cards are available in every state.

Things you can do if your application was denied

If your secured card application is denied, you have several options available:

  • Apply with a different bank. There are plenty of secured card options available. If you weren’t able to qualify for your first choice, give it a month and then try applying for your second choice – ideally with a different issuer. You can also look for secured cards that don’t check your credit.
  • Improve your credit score. Focus on paying down any existing credit balances before trying again. That means making your payments on time, keeping your utilization ratio at 30% or less and paying off any balances you can. Even a few small improvements to your score can help you qualify for a secured card.
  • Become an authorized user. If you have a loved one with good credit, ask if they’ll let you become an authorized user on one of their cards. The primary cardholder will remain responsible for payments, but your credit score will enjoy the benefits of on-time payments.
  • Look into credit-builder loans. A credit-builder loan serves the same purpose as a secured card and is a great alternative if you can’t find a secured card you want. The major difference is you won’t be able to access your “loan” until you pay off the balance in full.
  • Personal loans. A personal loan can also help you build your credit as you pay it back. However, this option isn’t ideal compared to a secured card. Consider this only if you also need cash for an important purchase.

How long should you wait before reapplying for a secured credit card?

Most credit card issuers suggest waiting about six months to reapply after being denied for a credit card application. Instead of rushing to fill out another application, take your time to build your credit over the next few months. Doing so can increase your chances of getting the best secured credit card possible.

However, there is no definite timeline. The six-month rule is just a suggestion, as the ideal timeframe may vary depending on your current credit score, the required score for the new card you want and a handful of other factors.

Maybe you were denied because you simply applied for the wrong card. Some secured credit cards have easier approval rates than others. You can increase your chances of approval by finding the right secured credit card for your financial situation. Here are a few secured credit cards with easier approval rates.

Applied Bank® Secured Visa® Gold Preferred® Credit Card

Finder rating 4 / 5 ★★★★★

Apply now
on Applied Bank's secure site

OpenSky® Secured Visa® Credit Card

Finder rating 4 / 5 ★★★★★

Apply now
on Capital Bank N.A.'s secure site

Capital One Platinum Secured Credit Card

Finder rating 4.4 / 5 ★★★★★

Apply now
on Capital One Bank®'s secure site

DCU Visa® Platinum Secured Credit Card

Other options if you need money now

If you’re in a pinch and need a way to cover expenses, secured credit cards aren’t your only option. Here are two other payment methods you may want to consider:

  • Prepaid Visa and debit cards: Prepaid Visa and debit cards will require payment up front, but they provide a flexible and secure payment method for a low cost. You can use the card for purchases at any retailer, service provider or even online.
  • Loans: If you need money right now, you could consider applying for a personal loan through a bank or credit union. You’ll likely need to provide collateral in the form of assets or equity, but personal loans can provide quick access to funds.

Compare secured credit cards

Name Product Filter values Minimum deposit required Purchase APR Annual fee Minimum Credit Score
Capital One Platinum Secured Credit Card
$49, $99 or $200
26.99% variable
New to credit
A no-annual-fee secured card that separates itself from the pack with a $200 credit limit after making a more affordable than average deposit of $49, $99 or $200.
Cleo Credit Builder card
A card made with your credit score in mind
OpenSky® Secured Visa® Credit Card
Starting at $200
17.39% variable
Apply for this card with no credit check if you're new to credit or have bad credit.

Compare up to 4 providers

Bottom line

Getting denied for a secured credit might sting, but it’s not the end of the world. There are a number of ways you can move forward, and whether that includes improving your credit score or finding a card that works for you, it all starts with your adverse action letter.

Once you’re ready to apply again, explore the secured credit cards out there to find the product that’s right for you.

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