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You’ve done the research, found the best credit card for your wallet, and filled out your application. So while you hope for a “congrats” email to hit your inbox, receiving a denial letter instead can hurt.
Not only does a credit card rejection mean you won’t get access to the new card, but it can also have a short-term negative impact on your credit.
Here’s how to find out why you were denied and take steps to improve your odds of approval next time — so you don’t rack up hard inquiries on your credit report with no new accounts to show for it.
After you receive the notice that your credit card application was denied, don’t hesitate to find out why.
Under the Equal Credit Opportunity Act (ECOA), credit card companies are required to share the reason for rejecting your application — as long as you ask within 60 days of receiving the denial.
These are just a few common reasons your credit application may be denied:
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Your credit score isn’t high enough.
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You have a limited credit history.
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You didn’t report a high enough income.
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You don’t meet the age requirements.
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You already have a high amount of credit card debt.
After reviewing the reasons for your credit card denial, you can ask the issuer to reconsider its decision. If you’re confident in your approval odds, a second look may help you get the outcome you want. Just know that there’s still no guarantee you’ll get approved.
You can typically find information about reconsideration from the issuer directly or within the letter you receive about your rejected application.
Applying for multiple loans or lines of credit within a short time frame could hurt your credit score — and your chances of getting approved for a credit card.
When you apply for loans or lines of credit, the lender makes a hard credit inquiry, which has a small impact on your score. According to FICO, each new credit inquiry itself shouldn’t reduce your score by more than five points. And they’re short-term. Hard inquiries stay on your credit report for up to two years, though only inquiries from the past 12 months are factored into your credit score.
In practice, this means that it can be smart to wait a few weeks or months before applying for a new credit card after a denial. Several applications in a short time can make you look more risky to potential credit card issuers.
Even if your credit card application is denied, there are ways to access credit. Here are some steps you can take to bounce back from a rejection.
It’s smart to review your credit report for inaccuracies regularly. But if your credit card application was denied because of information on your credit report, view your file and make sure the data is correct.
You’re entitled to a weekly, free copy of your credit report from Equifax, Experian, and TransUnion, which you can access through AnnualCreditReport.com.
Potential errors may be simple mistakes. When payment dates are reported incorrectly, they can show as late or missed payments, for example. But incorrect credit reporting information can also be a big indicator of identity theft, so look out for any unfamiliar accounts falsely opened in your name.
If you do find inaccuracies, report them. The Consumer Financial Protection Bureau (CFPB) has details on exactly how to file a dispute with each of the three major credit bureaus.
Once you’re ready to submit another card application, get realistic about what cards you can qualify for. High-value travel and rewards credit cards are often reserved for people with excellent credit scores and long credit histories. If you’re just starting out or you made some past mistakes that left you with a low credit score, you may need to reconsider which cards you can get approved for.
Here are some credit cards that can help you build credit:
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OpenSky® Secured Visa® Credit Card: Secured credit cards can be useful for building credit if you have a less-than-perfect credit score or no credit history at all. This card has a $35 annual fee, and you’ll need to pay an upfront (but refundable) security deposit of at least $200 at opening. The deposit amount will act as your credit limit.
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Capital One Platinum Credit Card: This is a classic credit-building card with no annual fee and no upfront cash deposit required. There are no rewards or other added benefits, but you’ll be automatically considered for a higher credit limit after six months.
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Capital One Quicksilver Student Cash Rewards Credit Card: For students working on building credit while in school, the Quicksilver Student card offers both credit access and rewards. You’ll earn 1.5% on every purchase. There’s no annual fee, and you can earn a welcome offer of $50 after spending $100 in the first three months.
You might also consider becoming an authorized user on someone else’s card account. The primary cardholder will remain responsible for making card payments, but the account will get reported to your credit file, too. With a positive payment history, low credit utilization ratio, and other best practices over time, you’ll see improvements in your credit score.
Getting denied from a credit card today doesn’t limit your ability to get approved in the future. If you’re set on a specific card — maybe it has a phenomenal sign-up bonus or its rewards perfectly suit your regular spending — take some time to improve the details in your application, then re-apply.
Read more: See our picks for the best credit card sign-up bonuses
Start with the reason for your rejection given by the issuer. If your debt is too high, for example, prioritize paying down your balances. If your income level is the issue, that may take more time to improve — but you can double-check to ensure you included all eligible income sources on your application.
No matter the reason for your denial, you can also get ahead by building your credit score. Avoid any delinquencies by paying at least the minimum due on your accounts each month and never making late payments. Keep your balances low, and don’t overextend the amount you borrow. Good credit habits can help increase your credit score and prove your creditworthiness to potential issuers over the long run.
With many credit card issuers, you can see whether you prequalify for a card without any impact on your credit score. Consider checking your prequalification status before you even apply to save yourself the rejection for a card that’s out of reach.
You’ll need to submit much of the same information, including your personal information and annual income. While getting prequalified doesn’t guarantee you’ll be approved when you do actually apply, it can indicate your chances of approval. Still, prequalifying can help you feel more confident that you will be approved before you actually apply and undergo a hard credit check.
This article was edited by Alicia Hahn
Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn’t include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.