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What to do when you get declined for credit cards

declined credit card

Introduction

Credit cards are a great tool for earning free travel and other rewards. But if you get declined when applying for a card, it can be a bummer! Understand what caused the denial and then figure out how to fix it. Once your credit score is higher, you’ll have an easier time qualifying for travel credit cards.

Hold off on applying for other cards or loans.

If you’ve recently been denied a credit card, then you should pause applying elsewhere for credit cards. All of those applications can hurt your chances of approval and make it harder to get approved in the future. Applying for multiple cards (especially after being declined) can make you seem desperate for cred and lenders may consider you higher risk. The same goes for applying for other types of loans or even credit products like cell phones that require a deposit.

The best course of action is to wait six months before applying again. If it took you seven years to be turned down once, don’t risk being declined again before then!

Understand why you were declined.

  • Make sure there aren’t any mistakes on your credit report that could be causing a decline. If you have any inquiries on your report from applications, this is the likely reason for being declined (even if it’s because you applied for other cards).
  • If you don’t have any high balances or missed payments, then it’s likely due to having too little credit history or not having enough income/assets to support additional lines of credit.

Check your credit score.

You need to check your credit score and report with the credit agencies. If you have had no new accounts opened in the past two years, it’s likely that your score has declined. If this is the case, then you should get a copy of your credit report from a major credit reporting agency—this will show what mistakes may be on there and how they can be fixed.

If there are errors on either one of these reports, dispute them immediately by contacting the credit agency directly and explaining why the information is incorrect, then sending supporting documentation that backs up their claim (i.e., contracts). A good rule of thumb is that if an account was closed because it was delinquent (late payments), then it can be removed from your report after seven years unless it was sold as part of some kind of debt consolidation package (like pay-off programs).

Deal with any outstanding debts.

Its best to deal with any existing delinquent loans or credit card payments before applying for another card. The same goes for any late payments that appear on your credit report. If there are collections or negative information related to debt owed by someone else (such as an unpaid bill), that can also be removed from your report if you pay the full amount of what’s due and make arrangements with the creditor to do so.

Build your credit score.

Build your credit score if low credit is the reason for your declined applications. here’s what to do:

  • Pay all bills on time. This will help build your credit history and increase your chances of being approved for a new card.
  • Keep credit card balances low. Credit card issuers want you to use their cards responsibly. If you have too high a balance or continuously carry large balances from month-to-month, this can negatively impact their decision to approve or deny an application.
  • Don’t apply for too many credit cards at one time. Some lenders don’t like it when applicants open multiple accounts within a short period of time because they may think that indicates financial instability or risky behaviour.
  • It may be helpful to open up just one account per year until you start seeing more approvals!

Conclusion

In summary, it’s important to understand why you’ve been declined, and you should do what you can to fix it. If there’s nothing you can do and it seems unfair, remember that credit card providers will be looking at your credit score in the future too.

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