Key points about: denied credit card applications
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If you had a credit card application denied, creditors must provide a statement with specific reasons as to why.
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Common reasons applicants are denied credit cards include low credit scores, no credit history, inadequate ratio of income vs. expenses, and not meeting minimum age requirements.
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There are alternatives to standardcredit cardsto consider if you keep getting denied for credit cards.
When you’re denied for acredit card, especially if you keep getting denied, it may be due to your credit score or credit history. If you understand the factors that cause creditors to decline a credit card application, you can worktoaddress credit issues andbuild good creditwith responsible credit card use,so you won’t keep getting denied for credit cards.
Creditors must tell you why your credit card application was declined
If you’re denied for a credit card or any other type of credit, the creditor is required to send you anadverse action noticethat explains why you were denied credit. Once you know the reason your credit card application was declined, you may be able to take steps to fix the problem.
Reasons for a credit card application to be denied
Credit card companies look at several factors when considering your application, and when you’re declined for a credit card, one of these things may be the reason:
Low credit score
If yourcredit scoreis low, start by checking your credit report for errors. You can request a free credit report fromannualcreditreport.com. You can dispute any errors you find. If you don’t see errors, take steps to address any problems in these factors:
- Missed or late payments:Creditors may report your payment as late if it’s 30 days past due. Paying late makes you a credit risk and increases your chances of being denied credit.
- Credit card utilization: Your credit utilization ratio compares the amount of credit you use to the amount of credit you have. Using too much of your available credit can negatively affect your credit score.
- Hard credit inquiries: Each time you apply for a credit card or loan, the creditor files an inquiry to receive your credit score andyour credit report. Inquiries may impact your credit score, so it’s best to avoid applying for several credit cards at once.
- Length of credit history:A long credit history, especially one that shows you’ve paid your bills on time, could make you a stronger candidate for a new credit card.
No credit history
Havingno credit historyat all means that you may be less likely to be approved for credit cards that are intended for individuals who have an established credit score.
Did you know?
Just because you have no credit history or are rebuilding your credit history, it doesn’t mean you can’t get access to credit. For example, there’s no credit score required to apply for aDiscover it® Secured Credit Card.1And, it could help you build your credit history.3
If you’re a student that was recently denied, you may be more likely to qualify for astudent credit cardeven if you have no credit history yet. For example, there is no credit score required to apply forDiscover Student Credit Cards.2
Income and expenses
Creditcard issuerstake your income and expenses into account when assessing whether you’ll be able to pay your credit card bill.
If you have a reasonably good credit score but keep getting denied for a credit card, it may be that yourannual incomeis too low or your rent is too high in relation to your income.
Your age
If you’re younger than 18, your application for a credit card will be denied. That’s because one of therequirements to sign up for a credit cardis being 18 or over, since 18 is the minimum age to get your own credit card account. But you can still get a credit card if a friend or family member is willing to add you as an authorized user on their card, depending on the issuer.
Alternatives when your credit card applications keep getting denied
If you keep getting denied for credit cards, there are alternative options you can consider.
Apply for a secured card
In some cases, asecured credit cardmight be your best bet if you had acredit card applicationdenied for a regular card.
If youapply for a secured cardand you’re approved, you’ll put down a deposit that’s equal to your credit limit. Then, you can use thesecured cardas you would any credit card. If you start paying your credit card bill on time, youcould build a credit history with responsible use3and may be approved for regular credit cards in the future.
If you have the Discover it® secured card, you can get your deposit back after six consecutive months of on-time payments and maintaining a good status on all your credit accounts.4
Become an authorized user
A friend or family member can add you as anAuthorized Userto a Discover® card. When you add a friend or family member as an Authorized User to your Discover® Card, you help them build a credit history, with responsible use.5
Choose a store credit card
Some retailers offer credit cards that may haveless strict application requirementsthan general credit cards. Retail credit cards may offer lower credit limits than you would get with a standard credit card, but using a retail card responsibly could pave the way to the ability to get approval for a general credit card down the road.
Eventually, after taking steps to put yourself on the right financial path, you can grow more confident when applying for credit cards.
