A credit card is an essential part of the modern financial toolbox. It's more convenient (and sanitary) than cash and provides protections that a debit card does not. Plus, a credit card can earn youand help . If you have a limited financial track record or checkered credit history, however, it can be difficult to get one.
There are many reasons why a credit card application might be denied. You may have blemishes on your credit report. You may have applied for too many accounts. Or it could be something else altogether. Being declined can be discouraging -- but there are options available to you.
What to do after your application is declined
- Determine why your application was denied: The Equal Credit Opportunity Act requires credit card issuers to provide applicants with a rationale for any declined application. Common reasons include a high debt-to-income ratio, a low credit score, insufficient monthly income, a limited credit history or delinquencies. Once you know why your application was denied, you'll know what to work on.
- Request a copy of your credit report: You should also request a copy of your credit report to ensure all information is accurate. If you were denied due to a low credit score, you'll want to spend some time AnnualCreditReport.com. to make you a better candidate next time around. Everyone is guaranteed a free credit report annually from each credit bureau at
- Ask for a reconsideration: Credit card companies can miss information or end up with incorrect information due to computer or human error. For that reason, these companies have a reconsideration process, where applicants can ask the company to reconsider the rejected application. If you believe you were wrongfully denied, you can call the credit card company's main customer service line and ask to talk to an agent about reconsideration.
- Find a more suitable card: It could be that your credit card application was denied because you weren't a good candidate; for example, the card might have a higher annual income requirement or credit score. Try to find a better fit.
- Work on paying off debt: If your debt-to-income ratio is too high, it could prevent you from qualifying for a credit card. Each lender has its own DTI requirements -- Wells Fargo, for instance, recommends a DTI of 35% or less to be considered a favorable applicant -- but shooting for less than 40% can boost your chances of being approved. Before applying for another card, try paying down your debt to lower your DTI ratio.
How to improve your chances of getting approved for a credit card in the future
Use your current credit cards responsibly
Your credit report and credit score are two of the most important factors when it comes to qualifying for a credit card. You can increase your chances of approval by improving your credit. Start by making monthly payments on time, paying more than the minimum when possible, and paying off any debts currently in collections. Practice healthy credit habits and you could start to see improvement in just a few months.
List all income when applying
Credit card companies look at your income and current debt payments when determining if you qualify for a card, so be sure to list all of your current income. Some applicants forget to include income from freelance gigs and side hustles, which could lead to a denial. But don't overstate your income -- lying on an application can be considered credit card fraud.
Look for cards that match your credit profile
To increase your chances of approval, read the eligibility requirements for each card and only apply to those for which you meet the requirements.
Become an authorized user
If you're worried you won't get approved a second time, you might consider becoming an authorized user on a friend or family member's credit card. This can help you establish healthy credit -- as long as the card owner is a responsible credit user.
Apply for a secured card
Secured credit cards are more accessible to anyone with poor or no credit. That's becauseare backed by a cash security deposit that is only refunded when the account is closed. In most cases, your credit line will be equal to your deposit amount. If your deposit is $500, for example, your credit line will also be $500. This protects the card issuer in case you default on your payments -- the tradeoff is access to a card that can help you start to build healthy credit habits.