There are a number of reasons why your application for credit may have been rejected. But you can use this information to help you build a stronger credit report and a higher credit score, to set yourself up for a brighter financial future.
So you were turned down. Now what?
Find out exactly why your application for a credit card was rejected, within the first two months after receiving notice. Perhaps you just made a mistake on your application, or there is something wrong with your work history details. If you are a young person or someone who is new to the world of credit, an immigrant or someone who hasn’t had a need for credit in the past, you might just be lacking a solid credit history. Lenders look at your credit report, which has far more information on it than just a three-digit score. It also shows when you were late for any credit payments in the past, and how many times you have made applications for credit. Once you are aware of the reasoning behind your rejection for a credit card, you can take steps to improve your situation.
Half the battle is knowing where to apply
There are myriad choices when it comes to credit cards. Decide on a credit card offer that fits your situation. For example, if you are a student, you may appreciate a lower annual percentage rate (APR) and fees on your card, while forfeiting the bonus air miles points. Many lenders will target first-time card applicants as part of their marketing, making the decision process easier. Your credit counselor might advise you to build up a credit rating slowly, by becoming an authorized user on a family member’s card. Another option is to apply for a secured credit card, but this should be your last option as it is not the most ideal in terms of your credit rating.
Lay the foundation for an approval
Once you have chosen which credit card you will apply for, you need to set yourself up for a win. Don’t apply for a credit card when you are between jobs and don’t apply for more than one at a time. You need a steady, consistent income to show on your application. Make sure you list all sources of income so that your finances are in good standing. Make any other loan payments on time so that nothing negative shows up on your report. You are entitled to check your own credit score once a year for free, so do this before applying for a loan, line of credit or credit card. This way you can correct any mistakes before applying.
The main thing to remember is: don’t get discouraged. Credit is an important part of our society’s structure and we all have to start somewhere. Think of getting rejected as just a learning process that will help to prepare you for success in the future, and better luck next time.