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Denied For A Credit Card? Do These 5 Things ASAP...July 21, 2020
It’s difficult to get by without a credit card these days – they are an indispensable part of life for so many consumers in the U.S today.
Whether you want to purchase a product or service online, pay for groceries at a brick and mortar store, or buy plane tickets for your next vacation – your piece of plastic can do it all!
That is why it can be quite disheartening to find that your credit card application has been rejected.
So, what should you do if your credit card application is denied?
Well, you need to follow the steps listed below.
1. Go through your Adverse Action Letter
According to The Fair Credit Reporting Act, issuers are required to send the consumers notice when their credit application is denied due to an issue in their credit report.
If there is a non-credit related reason why your application is rejected, then also, the card company will send you a notification regarding the same.
Two of the reasons your application may be rejected are:
- You are building your credit history from scratch so there is not much information on your credit report.
- You have certain negative entries, for example, payments that are more than 30 days late or collection accounts. This kind of information stays on the report usually for seven years and can be troublesome for consumers who want to be approved for credit.
- You already have a lot of debt in terms of loans, mortgages, or high card balances that make you appear as a risky borrower.
- Your income is too low – for example, the rent that you pay may be almost as much as the income that you make, or perhaps you have an unstable employment history.
In case the application is rejected due to information in your credit report, then you are entitled to a free copy of that credit report which you can view anytime over the next 60 days
2. View your credit report
Review your credit report to understand if the negative confirmation contained in it (the cause for the rejection) is accurate.
Roughly 1 in 4 consumers have errors in their reports that also affect their scores.
If that is the case, then you should dispute the error with the credit bureau.
Once the error is corrected, ask the issuer to review your application again.
Moreover, you can ask the bureau to send the updated report to anyone who has viewed it recently.
If the information in your report is correct, then try to fix the problem. For example, if your card balances are too high, then try and pay them down.
3. Check your card application
It’s possible that you made a mistake in your application letter, so check that as well.
For example, perhaps you misstated your annual income as $5,000, instead of $50,000; or maybe you neglected to mention certain additional sources of income.
Understand that it is not just your independent earnings that count as income – for example, if you are a homemaker, then you can qualify for a card based on your partner’s income.
In case you did make a mistake, call the issuer and explain the matter to the representative – they may be able to fix the problem.
4. Ask the issuer to reconsider
Let’s say that just once, a few years ago, you made a late payment on your credit card - and that's why your application was rejected.
In that case, you can call up the issuer and explain the matter – tell him that it was a one-time event and does not reflect your credit habits.
Request that they please reconsider the application. It's worth a shot.
5. Approach another issuer
If you’ve tried everything and are unable to convince the issuer to approve your application, then try applying with another company that is likely to approve your request.
Different issuers often have different approval criteria, so you may find success with another company.
But remember to apply with caution, because if you approach too many issuers at once then all the hard inquiries will appear on your credit report and you will appear desperate – this will again lead to rejection.
However, if you are grappling with poor credit, then instead of trying one credit card issuer after another, it would be a better option to first build your credit by applying for a store credit card or retail credit card.
One of the reasons consumers apply for additional credit is because they may need it to temporarily fund their businesses.
In such circumstances, it can be disheartening to be rejected because of reasons such as low income. However, if you have a good score and you need credit, then you can approach our team at Fund&Grow.
We offer clients with good credit the opportunity to obtain $50,000-$250,000 at 0% interest. Available for a period of 6, 12, or 18 months, this amount is unsecured and can be used for any purpose, from financing a small business to providing a down payment on a property.
If you need this kind of financing, call us, at (800) 996-0270, and we will help you out.