Rejected for a Credit Card? You're Not Alone
Applying for a new credit card is typically a pretty straight-forward process. In many cases, you’ll receive a hard copy invitation (normally based on market research and other financial data) to apply for a bank’s credit card. The perks and interest rates are always different, but the process is usually the same (unless you have one of those super fancy American Express Black cards—aka, the “Centurion Card”, which is actually anodized titanium, unlike the plastic that we commoners carry around in our wallets)—you’re invited to apply by way of providing key information about your current income, social security info, and miscellaneous details. In a lot of cases, you can apply in under 5 minutes. From there, the credit company’s bank will run a series of checks on your credits to determine if you’re qualified for their card.
If you’re accepted—that’s great! Congratulations on your new credit card, and we hope it helps you make wise financial choices. (Of course, we can’t recommend applying to a bunch of accounts at the same time, as it will make you look like you’re fishing for someone to take a chance on you--which implies that you’re strapped for cash.)
If you’re rejected for a credit card, though? That can be brutal. And maybe it drives you to attempt further credit applications, which can encourage a death spiral into subprime credit.
Credit card rejection is a good sign that you don’t look like a safe bet to creditors, and perhaps even a sign that you might be turned down for other types of credit, like a home loan or auto loan. But being proactive about your rejection is one of the main ways to beat back this perception and these risks.
What To Do When You've Been Rejected for a Credit Card
Here are 5 of our suggested methods to beat back the negative side effects of being rejected for a credit card.
- Give it some time. Wait 6 months before applying again for another card. Yeah, we know it’s tempting to try to get someone else to take a risk on you, but don’t. It will only lead to more hits on your credit, and create more doubt from a lending perspective
- Assuming you receive an “adverse action letter” you should read it. It will give you valuable insight into why you were rejected (was it your credit score or outstanding debt to income ratio?).
- Check your credit score! We’ve talked about this A LOT in the last year, and we encourage all of our guests to know what their credit is before they start picking out vehicles on our lots.
- See something wrong on your credit report? Challenge the error! While computers seem to make all the decisions, at the end of the day, human error (and the ability to fix it) is still in play. If you see something fishy on your credit report, you’re allowed to speak up and challenge the error. You might get the mistake removed (providing appropriate documentation), and wind up having better credit than you thought you did.
- Stay calm and carry on. Rejection is painful, but it shouldn’t cost you your reputation or take up valuable time you could be using to rebuild your credit. If you’ve been turned down for a credit card, the very first thing you should do is vow to be patient with the credit company in question and not beat yourself up about your financial missteps. We all make them. Cut yourself some slack, and promise to do—and be—better with your finances moving forward.
Have you been rejected for a credit card? Got any additional tips for our readers, or just want to sound off in a safe space? Sound off in the comments—we’d love to hear from you!