Achieving a good Credit Score is a goal that almost every financially ambitious individual is striving for. From naive students to financially experienced professionals and everyone in between, everyone wants to boost this magical number a little bit more.
However, there’s one thing that even a good Credit Score cannot guarantee – a successful application. That means that credit card issuers can still reject individuals with even optimum scores, financial assets, and wealth.
As surprising as it may sound, wealth holds little importance when calculating your Credit Score. The main reasons why a potential lender declines an application can be complex, and if you have an excellent credit score, facing a rejection may seem even more confusing.
Although some services make it easy to find a credit card, it still unsettles the unlucky applicants and takes time to understand why it happened. Even after spending hours trying to find the reason for rejection, most people end up scratching their heads and feeling more lost than ever before. Fortunately, a little guidance can make a big difference and will make sure that you don’t adversely affect your credit further. So what can you do after your application is rejected?
- Wait to Reapply
Don’t apply for other credit cards to find out if you’ll get accepted. The more cards you apply for, the more will be the chances of being turned down. The reason is that the more inquiries mentioned on your credit report will continue to reduce your credit score and make you look needy for more credit.
These Inquiries may start showing up on your credit report almost immediately. So, if you have been rejected for a credit card application, it’s better to find the underlying reason before applying for a new card.
- Get Your Credit Report
If your credit card application is rejected due to your credit report information, you can request a credit report within 60 days. Examine your credit report carefully, and if there are any errors, you can contact your credit card issuer right away. After updating your credit report, you can ask the credit card company to review your application again.
- Analyze Your Adverse Action Notice
Most credit card companies take up to 30 days to respond to an application. However, you’ll most probably hear from them within a couple of weeks. You’ll get a letter from your credit card company describing the main reasons why your application was declined. It could be anything ranging from a high credit card balance to late payments. There could be something wrong with your credit report. In such cases, get a copy of your credit report and determine the accuracy of the information.
- Check Your Credit Score
If your credit score is a factor in the rejection of your application, you’re eligible to get a free credit score as per the Fair Credit Reporting Act. Contrary to the credit report, getting a credit score is pretty straightforward. If your application is denied, the creditor should send it to you even without asking.
With your free credit score, you’ll also get a list of factors that affect your credit score. These may include things like a lesser number of installment accounts or high balances, among others.
The adverse action letter, along with your credit score, can give you a much better idea about why your application was rejected.
- Fix and improve Your Credit
Your application might not be approved because of poor credit. Recent delinquencies, high balance, or unpaid collections are some of the major reasons behind most denied applications. You must fix these things before applying for another card.
Make use of your credit report once you’ve decided to repair your credit. Your credit can be improved by finding and disputing errors, paying down your balances, and reducing your credit applications.
- Apply for a Secured Credit Card
Getting a secured credit card is a good alternative for individuals with poor credit. You’ll need to make a security deposit according to your card’s credit limit to get this card. This deposit acts as a security measure for the credit card company that they normally use if the cardholders default on a payment. On the brighter side, if you make your payments regularly, some card issuers may also offer you an unsecured card.
Credit scores used to be oblivious to most people in the past. Fortunately, today we can access a lot of valuable information at any time we want. If you have a high credit score, but you’re still unsure about getting approved for a credit card, take a closer look at your finances. See if any specific areas could become an obstacle in your way to getting approved? Sometimes, low income and past credit mistakes are hard to rectify immediately. However, most of these mistakes can be eliminated with some discipline and by adjusting your credit habits.