What to do if you’ve been denied by a Credit Card Company

“My credit card application was rejected! Why and what do I do now!?”

Understanding the Credit Card Process

What now? How do I find a card for me?

Have you recently applied for a credit card only to have your credit card application rejected? Honestly, don’t get yourself down or think you are ‘unworthy’ of credit. According to The Nilson Report on credit card usage and household debt of 2008 (www.NilsonReport.com), about 15% of all credit card applications are denied or otherwise rejected. This was back in the credit card heyday! Which means it is even harder nowadays to get credit, so again, don’t feel bad — you are not alone!

Following a rejection, you may be tempted to give up or think you will not find a solution — don’t. There are a number of Credit Cards for people with Bad Credit as well as loans for individuals with less than stellar credit or personal loans for those in the military. So, what should you do after you’ve been turned down for a credit card or loan? Follow these seven important steps:

    1. Take a deep breath and relax. Nothing good will be accomplished when you’re frustrated, upset or angry. Take a moment to just calm down.
    2. Understand why you were turned down. Depending on the method you used to apply you may be given a reason immediately as to why you did not receive approval. Many online applications offer the reason after the automated algorithm evaluates the information you supply, your credit history, financial details, and personal information. No matter the method, every lender is required to supply you with a written reason for denial as well as details on how they came to the decision. This report, also known as an Adverse Action Letter/Notice, will usually arrive at the location used on the application within 6 to 10 days following the application.

      Some common reasons for credit card application denials are:

      • Incomplete or inaccurate information on the application.
      • Your income source is unverifiable or you don’t have enough income.(This is one of the most common reasons)
      • You have not been at your current full-time, part-time, or contract job long enough. In this case, it may be appropriate to work with the credit card company to see if you can provide additional references or history to give them more confidence in your ability to maintain employment.
      • Limited or no established credit history.
      • You have credit card charge off(s) on your report. (A charge off is when a consumer doesn’t make payments on a credit card for six months or more and the agency doesn’t believe the consumer will pay.) It’s hard to obtain new credit, when their is evidence of non-payment of similar credit agreement(s).
      • Too many outstanding credit cards or high balances. This is where you have credit but all the credit you have, even if the history is good, are “maxed out.” This is often an indicator to lenders that you are at your max for your income.
    3. Review the information you supplied the creditor.
    4. Review your credit. You can do so for free once a year at AnnualCreditReport.com or, if the reason you were denied was due to information on your credit report, you can request a copy of your credit report from one of the main reporting agencies for no charge: TransUnion, Equifax, or Experian.
    5. Dispute, correct, fix, or pay off items on your report. If you find things wrong — as in miss reported or completely wrong, dispute them. If it relates to a debtor, they will have 30 days to respond otherwise it HAS TO be removed from the report! If you have items that are within your means to pay on or off, do so; this will help improve your credit.
    6. Fix your credit profile. You can do this by applying for retail credit or by obtaining secured credit. A secured credit card, is a credit card but it may be secured with property you own (aka. collateral) or with some type of asset you possess.
    7. Apply for credit again. Never fear to reapply once you have the confidence of knowing you have done what is necessary to improve your credit. If you are unsure of your credit worthiness or would like to talk with a credit card company willing to work with individuals working to rebuild their credit, apply to some of these credit cards to rebuild credit.

Don’t let a rejection keep you from moving forward. With a little work and the heart to press on, you can find the right card or loan for you.

About Kevin Williams

Kevin works as a independent consultant, helping people improve their financial situations. The author has a BS and Masters along with years of experience with credit cards, techniques for improving individual credit and life.

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