What To Do If Your Credit Card Application Is Denied (2024)

Though it may feel like it at the time, a denied credit application isn’t the end of the world. It happens more often than you think, even to customers who have their act together. Sometimes there’s a mismatch between your creditworthiness and the specific card you applied for. Other times, there’s a reason you never considered hiding behind your denial.

If you’ve recently been rejected—or if you think there’s a chance of it happening on an application you’re considering—here’s how to handle it. More importantly, here’s how to ensure it doesn’t happen again.

Reasons Your Application May Be Rejected

You May Have Limited Credit History

Though some credit cards will approve applicants with a short credit history, many issuers like to see a steady track record before offering approval on their most popular cards. Even if you’re a very responsible customer, you simply might not have a long enough credit history to qualify. If that’s the case, continue paying your bill on time and making other smart credit choices to continue building (and lengthening) credit.

You May Have a Low Credit Score

Each credit card has a different threshold for the creditworthiness required. Generally speaking, more premium cards require excellent credit, though there’s no hard and fast rule.

In some cases, you may see vague references to the level of required credit on application forms. If you see score descriptors, you can use these FICO categories to help you determine if you’re a good candidate for that card.

Remember, numerous factors go into calculating your FICO score. A history of late payments—or not paying your card at all—is a major factor, as is consistently maxing out your cards or having a high utilization rate.

You May Have Too Many Credit Accounts

Another common reason for an application being denied is having too many new accounts opened in a short amount of time. Some issuers have explicit rules on how many cards they think is reasonable; one well-known one is the Chase “5/24” Rule. This rule discourages customers from applying if they’ve opened five or more accounts in the past 24 months since it’s often an automatic rejection.

You May Have a Poor Track Record With the Issuer

If you’re applying for a new card with an issuer you’ve previously had (or currently have) an account with, they will consider your history as a client as part of their decision.

Customers who previously closed cards shortly after opening them or customers who apply for cards and then never use them aren’t highly profitable to the bank. And, if the issuer suspects you’re “gaming the system”—earning rewards through manipulative methods—they may temporarily or permanently deny you new cards.

Your Income May Be Too Low

Nearly all credit card applications require you to list your current income. That’s because it’s a key consideration when deciding whether or not you’ll be approved. Card issuers don’t want to take on a customer who may be at risk for taking on too much debt in relation to their income.

A low income doesn’t necessarily mean your application will be denied, though, especially if you have no other loans and a reasonable monthly housing payment. In the same vein, a high income won’t guarantee approval if you have numerous ongoing financial obligations. The number of existing credit accounts—and their associated credit limits—are also considered in relation to your income.

If your income has recently increased due to a new job or other changing circ*mstances, you may need to wait a few months before the card issuer classifies it as stable income.

You May Have an Error on Your Credit Report

If you think you’re the perfect candidate but were denied anyway, it’s possible there is an error on your credit report. You can get a free copy of your credit report to look it over and see if something was misreported. Sample errors include accounts inaccurately described as being late, incorrect balances or accounts mislabeled as being open or closed. Review your credit report thoroughly and dispute credit report errors if needed.

What to Do to Be Reconsidered for a Card

Here’s your best course of action to be reconsidered for a card you were initially denied.

Step 1: Call the Issuer to Find Out Why

Credit lenders are required by federal law to tell you the reason it rejected your credit application or inform you of your right to request that reason if you ask within 60 days of denial. Usually, you will get a letter in the mail a week or two after your application stating the reason you were denied. In some cases, you may wish to call and ask for more details (or to get an explanation sooner). If you weren’t provided a direct phone line to call, ask to speak with someone in reconsideration.

Occasionally, your rejection may be caused by an error. In this case, a quick call may clear it up: Perhaps the address on your application doesn’t match the one in your credit report, or your name changed or there was a typo in your stated income. A phone agent can clear these things up and potentially even re-process your application.

If your reason for denial was because the card issuer has already extended you their maximum credit allowance, the reconsideration department may also be willing to work with you by transferring credit lines from an existing account you hold to a new card. This only works if you already have an established account with the same issuer and have credit you’re willing to reallocate.

More likely, though, your call will be informational. After speaking with someone in reconsideration, you’ll at least have an understanding of what was holding you back so you can improve your situation before re-applying (or applying to different cards) in the future.

Step 2: Use Your Credit Report as a Resource

A credit report summarizes your credit profile with details on all of your accounts (including credit cards and loans), your payment history, collection items and other financial records, including bankruptcies or tax liens.

Reviewing your credit report with care provides far more details than the information you’ll be provided on a reconsideration call. For example, instead of merely being told you’ve missed payments, you can see how many payments you’ve missed, on which dates and on which cards. These details can help you dial into the biggest problems so you know what to focus on first.

Like with many things in life, knowledge is power. Taking the time to read over your credit report gives you insight into what card issuers evaluate during the card approval process and makes you a smarter applicant.

Step 3: Improve Your Creditworthiness

Fixing your credit might feel like an impossible hurdle, but if you take it step by step and commit to lasting change, it’s relatively straightforward. Your credit report probably provided insight into where you have room for improvement. Most likely, you’ll want to focus on paying your bills on time, keeping your utilization rate low and paying down any other existing debt.

Not all cards require exceptional credit and in some cases, you may only need to move from a fair credit score to a good one. Once you’ve improved your credit score, consider what credit cards are likely to provide the benefits you’re looking for and that you’re realistically a candidate for. After being denied, you may decide an alternate card may be acceptable or you might want to take a few more months until your creditworthiness improves even more.

How Long to Wait Before You Reapply

Unless your rejection was due to a credit reporting error that’s been corrected, patience is key. Card issuers want to see a track record that your habits have changed for the long haul. Before reapplying, be honest with yourself: Have you fixed the problem? Is your financial situation notably different now compared to the first time?

If you can answer yes to both questions, you might be ready to re-apply. Some issuers have guidelines on how long to wait between applications. When they don’t have well-established policies, a good rule of thumb is waiting six months. That’s often long enough to improve your score and show a pattern of creditworthiness, both of which will improve your chances of approval.

Bottom Line

Not all credit applications are instantly approved, even if you would consider yourself a reasonably good candidate. Numerous factors can impact your approval and being denied can often be a temporary hold-up rather than a permanent rejection. Most reasons for denial are in your control, which means a little bit of effort can set you up for success the next time you apply.