Credit card applications get denied for many reasons. You might be able to address some of these immediately to get your application approved. With others, you may need to wait or work on your finances over the coming months or years.
Declined credit card applications rarely get reversed right away, but you might want to contact the card issuer to see if you can do anything. Especially if your application is pending rather than declined.
For example, the company might not instantly approve your application if it has trouble checking your credit reports or verifying your identity. And you might be able to address these concernswith a representative.
When that's not an option, you'll want to understand the common reasons that credit card issuers don't approve applications, and why your particular application was declined. You can then increase your chances of getting approved when you reapply.
Common Reasons Credit Card Applications Get Denied
Credit card companies may decline applications for many reasons. But here areseven common situations,and a brief explanation of what you could do in response.
- Poor or no credit:If you have alow credit scoreor don't qualify for a credit score—because you haven't used credit recently or at all—you might want to focus on rebuilding orestablishing your credit.
- Low income:Consider ways to increase your expected annual income and review what the application allows you to include as income. Listing all your eligible income might increase your chances of getting approved.
- Recent credit card applications:You might not get approved if you recently applied for a card, even if that application was approved. Review the card'sterms and conditionsto see if it states how long you need to wait between applications.
- Negative history with the issuer:You might have trouble getting a new credit card if you fell behind on other accounts with the company. Try to repay or settle past-due accounts and look for options from other issuers.
- Frozen credit reports:Credit card issuers might not be able to review your credit report if it's frozen.1Unfreeze, or temporarily thaw, them before reapplying.
- Too many credit cards:Some credit card companies may deny your application if you have too many cards with the company or recently opened cards with other companies.2The specifics can vary widely, so try to research issuers' policies online before applying.
- Too much available credit:If you already have a credit card from an issuer, it might not want to extend you additional credit. See if you can move available credit from an existing card to qualify for a new account.
If a credit card issuer declines your application, you'll typically receive a letter explaining why you weren't approved within 30 days.3You can use these to guide your next steps.
Additionally, if the card issuer used a credit score, it has to tell you the score it used and list up to five reasons your credit score wasn't higher. These are listed in the order of their impact on your credit score—focusing on the first few could be a good idea if you want toimprove your credit score.4
When Can You Reapply for a Credit Card?
You can apply for a credit card at any time. However, if your application was denied and your circ*mstances haven't changed, you might not want to reapply for the same card immediately.
New credit card applications might lead tohard inquiries, which could hurt your credit scores and decrease your chances of qualifying for new loans or credit cards.5Some card issuers also have policies of declining applications from consumers who recently submitted applications.
As a general rule of thumb, consider waiting around three to six months before reapplying. In the meantime, try to improve your creditworthiness, which might increase your chances of getting approved when you reapply.
How to Improve Your Credit Before Reapplying
Improving your credit scores can help you qualify for more credit cards, higher credit limits and lower interest rates. Here are four things that might help.
Pay down credit card balances
Your credit utilization ratio is the percentage of your available credit on revolving credit accounts, such as credit cards, that you're currently using. It can be an important factor in your credit scores, and it's one of the few factors that you might be able to change quickly. If you can pay down your credit card balances, that might lower your utilization rate and increase your credit scores.6
Even if you pay your credit card bills in full each month, you might have a high utilization rate because card issuers generally send updates to the credit bureaus several weeks before your bills are due.7Making early payments to lower your account's balance before it's reported could help your credit scores.
Settle or pay off collections
Settling or paying off collection accounts may improvesome of your credit scoresand your overall creditworthiness.8A credit card issuer also might not approve your application if you currently have a past-due account.
Review your credit reports for errors
Review all three of your credit reports from Equifax, Experian and TransUnion closely to see if anything looks amiss. For example, a credit card or loan that you didn't open on yourcredit reportcould be a sign that you were the victim of identity theft.
You canreport the identity theftto the Federal Trade Commission (FTC) to get a recovery plan and dispute the fraudulent accounts with the credit bureaus.9Your credit scores could increase if fraudulent accounts with negative information are removed from your credit reports.
Add positive information to your credit reports
Adding positive information to your credit reports might not immediately lead to a significant jump in your credit scores, but it's important for building good credit in the long run.
If you're establishing or building your credit, you may want to start with a secured card or a credit-builder loan. These credit accounts have less stringent requirements, and your on-time payments can help you build positive credit.10
Get Prequalified for Your Next Credit Card
When you get prequalified for a credit card, the card issuer takes an initial look at your information to let you know if you'll likely get approved or denied.
Although it isn't a guarantee of approval, you can often quickly get prequalified online with a soft credit inquiry. Unlike hard inquiries from credit applications, these don't affect your credit scores.
The CareCredit credit card has anonline prequalificationform that won't affect your credit scores and can give you results within seconds.
Managing Health and Wellness Costs With the CareCredit Credit Card
If you are looking for an option to help manage your health and wellness costs, consider financing with the CareCredit credit card. The CareCredit credit card can help you pay for the care you want and need and make payments easy to manage.*Apply todayand use our Acceptance Locator tofind a providernear you that accepts CareCredit. Continue your wellness journey by downloading theCareCredit Mobile Appto manage your account, find a provider on the go and easily access the Well U hub for more great articles, podcasts and videos.
Your CareCredit credit card can be used in so many ways within the CareCredit network including vision, dentistry, cosmetic, pet care, hearing, health systems, dermatology, pharmacy purchases and spa treatments. How will you invest in your health and wellness next?
Author Bio
Louis DeNicola is a freelance writer who specializes in consumer credit, finances and fraud. He has several credit-related certifications and works with many lenders, publishers, credit bureaus, Fortune 500s and FinTech startups. Outside of work, you can often find Louis at his local climbing gym or cooking up a storm in the kitchen.
