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What to Know About Credit Card Rejections

Finding out a bank rejected your credit card application can be difficult. What steps can you take after credit card rejection to ensure your next application succeeds? Here’s everything you need to know about credit card rejection – and how to prevent it.

Why Was My Credit Card Application Rejected?

The first thing you’ll likely want to know after hearing of your application rejection is, “why?” Credit card rejections occur for a variety of reasons, including:

  • Low credit score
  • High balances on existing credit accounts
  • Too many credit inquiries or applications within a short period
  • Too short of a credit history
  • Income too low

What Credit Cards Have Higher Rejection Rates?

The best credit cards come with the juiciest rewards. These include premium perks like airport lounge access, elite status in loyalty programs, and points/ miles on purchases. These cards may also come with signup bonuses, 0% intro APR offers, or other benefits.

Banks typically reserve rewards cards like these for those with the best credit scores. To qualify, applicants need an excellent credit score. For this reason, rewards cards, especially travel cards like airline cards or hotel cards, have the highest rejection rates.

Conversely, retail cards (and especially store-branded credit cards) are the easiest credit cards to get, as they usually only require fair credit (a FICO score in the low 600s).

How Does a Credit Card Rejection Impact Your Credit Score?

Credit card rejections don’t hurt your credit score. Most credit card applications require checking your credit report – what is known as a “hard inquiry.” These inquiries will slightly lower your credit score but not enough to cause any real worry. Usually, these dips resolve themselves in a matter of months.

Too many hard inquiries in a short window can cause more harm, however. Having several inquiries in a row make an applicant look desperate for credit – which can put potential lenders off. Because of this, you should always try to keep your hard inquiries down to a minimum – no more than a few per year.

What to Do If Your Credit Card Application is Rejected

If your credit application is rejected, there are the specific steps you should take:

Read the Adverse Action Notice: The Fair Credit Reporting Act of 1970 mandates that banks send failed applicants notice of why their application was denied. This process generally takes ten business days and will outline the reasons why the bank turned down your application.

Call the Bank’s Reconsideration Line: All banks and lenders have a reconsideration hotline. These customer service numbers allow failed applicants to speak with an application specialist to plead their case and have their application potentially re-evaluated.

Algorithms decide most credit applications, so finer points might be overlooked. Use these calls to bring up things like your history with the lender, your credit history, or other items that could work in your favor. If you fail, don’t be afraid to try again – you might get a more sympathetic agent.

Improve Your Credit: The most basic step to take after a rejection is to check your credit score and work to raise it. Repairing credit takes time and good habits, but it can pay dividends in as little as a few months. Pay your bills on time and in full each month. Keep your credit usage under 30% – these are simple tips that can reward you in the long run.

Tips for Those Considering Applying for a Credit Card

The best advice for anyone considering applying for a new credit card is to do your research beforehand. Comparison websites (like BestCards.com) can give you insight into the credit score needed. Forums, like MyFICO.com, provide real-world advice and tips from regular consumers that will inform you about what these lenders look for, the approval odds, and more. And always make sure you stay on top of your credit score and monitor your credit reports.

Related Article: How to Fix Bad Credit to Buy a House

About: Cory
Cory Santos

Cory is BestCards.com's "Jack of all trades" and resident rewards expert, covering all facets of the points game – especially travel, hotels, and airlines. In addition to credit cards, Cory finds that jogging, cats, and memes are essential parts of a balanced day.