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Having your credit card application denied can be stressful, but it does not mean you will never get credit. According to Richard Best, owner of RT Best Consulting, a financial services consulting firm, having your application denied should not be the end of the road. Various reasons can make your application for credit card declined.

  • High balances. You could be denied a credit card if you have high balances on your credit cards or loan. This is because before your application is considered, creditors consider your credit utilization ratio. This ratio measures your total debt against your total available credit.
  • Too many credit cards or inquiries. You could be denied credit if you open many accounts within a short period. In addition to many hard inquiries can affect your credit score and reduce your chances of getting a credit card.
  • Low income. Your level of income is one of the big determinants on whether you secure credit or not. Credit card companies are required by law to verify that the applicant has enough money to afford credit. In addition, your sources of income must be legal and approved.

What to do When You’re Denied credit

When you are denied credit, the lender always issues you with adverse action notice. The notice can come in form of a phone call, email, or letter. This notice highlights all reasons why you were denied credit.

  • Ask for Reconsideration. When your credit card application is declined, you can call the issuer to have your application reconsidered. When you get the issuer, you get to talk and explain your case to an actual person. When calling for reconsideration, you need to be polite, find out why your application was denied, give reasons why your application should be reconsidered, and give convincing reasons why you need a new card.
  • Check Your Credit Reports. Your denial of credit could be attached to your credit score or credit reports. It is good to check your credit report from various bureaus before you apply for a credit card.
  • Try Applying for a Different Credit Card. It is not the issuer’s wish to have your application denied. You may need to adjust your expectation by applying with a different issuer.