Were You Turned Down for a Credit Card?

/ BY / Credit 101

No one fills out a credit card application thinking that it will be denied. So it can come as a shock when you get notified that you won't be getting the card. Your first question may be "Why was I turned down?" and your second "What can I do to get a positive response next time?"

Why credit card companies say no

  • Your credit score wasn’t high enough.
    If the credit card company used your credit score in any way in making its decision, federal law requires that it send you an Adverse Action Notice that includes your credit score. You’re also entitled to a free copy of your credit report from the bureau that the bank used.
  • You may not make enough money, or have good enough credit to qualify for that particular credit card.
    Some cards may require you to have a higher income level or higher credit score than others
  • You applied for too many cards (or too much credit) at once.
    The bank may worry that you’ll be unable to handle all that potential debt—and it doesn’t want to lose money if you can’t meet your obligations.
  • You haven’t held your current job very long, have long periods of unemployment or have frequently switched jobs.
    Credit card companies want to know that you’ve got stable employment and a steady income.
  • You could have neglected to fill out the form completely.
    It’s your responsibility to check and double check to make sure that you’ve filled in all the necessary lines and boxes.

If you’re still not sure why your application was rejected, you can try calling the bank that issues the card you wanted. They may tell you their reasons, but they’re under no legal obligation to do so.

Improve your chances for the next time

If you’ve been rejected for one credit card, don’t start applying for more right away. Take the time to verify the reasons behind the turndown—and go through the necessary steps to correct problem areas before you fill out another application.

  • Check your credit report for errors and dispute any incorrect information that you find there.
    Remember, under federal law you’re entitled to one free copy from each credit reporting agency each year.
  • Reduce your debt to income ratio to 36 percent or less.
    Credit card companies (and other potential creditors) are more likely to approve your application if the total amount of recurring debt that you have is less than 36 percent of your grow monthly income. When it comes to getting credit, the lower you can keep this number the better.
  • Boost your credit score.
    Pay down balances, get caught up on late payments, and make it a priority to get all your payments in on time.
  • Consider applying for a secured credit card.
    With this type of credit card you’ll deposit a certain amount in the bank and receive a credit card with a set limit (often equal to the amount of the deposit). The bank will pay interest on this account and won’t touch the initial amount as long as you make your credit card payments on time. Just make sure that you’re getting an account that that the bank will report to the credit bureau. Don’t confuse a secured credit card with a prepaid debit card, which will not help boost your credit score.
  • Look for cards that fit your financial situation.
    If you’ve had trouble with credit in the past, look for cards for people with bad credit. Still in school? There are cards designed specifically for both high school and college students. (If you’re under 18, however, you’ll need to get a responsible adult to co-sign your application.)
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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. CreditCardXpo.com recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.