A credit card is crossed out with the words rejected on it with a yellow background

Why Was My Credit Card Application Denied?

Milad Hassibi July 9, 2018


Often times, consumers with good credit think that their credit score is the only thing that matters when applying for a credit card. You may have recently applied for a credit card and been notified that you were denied. But why?

If you apply for a credit card and are denied, the lender or bank is legally required to explain why you were denied, but only if you ask. According to the Equal Credit Opportunity Act, the creditor has 60 days to notify you of their reasoning.

If your application was denied, here are a few possible reasons:

Too Many Inquiries

Anytime a lender or creditor is considering giving you a line of credit (such as a credit card or a A credit card application with a red denied stamp on an orange backgroundloan), they will perform a hard inquiry, often referred to as a hard credit check. If you have recently applied for multiple lines of credit, there could be a number of recent inquiries to your credit. Many lenders are scared of excessive inquiries because it may mean that the consumer looking for credit is in a financial bind. In this situation, wait 30 to 60 days before reapplying.

Limits

Believe it or not, credit card companies will only allow you to hold a certain amount of credit cards with them. For instance, American Express will allow its customers to have only 4 current and open credit card accounts. Some issuers will place limits on how often you can receive a new card as well.

Errors

Many consumers are rejected simply due to errors in their application or incomplete information. For instance, if you are attempting to apply for a business credit card, you may be denied due to lack of information. The bank may need proof of ownership along with specific business documentation, such as a recent business filing.

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If you think this could be the error, simply call the lender that rejected you and ask them if they require any additional information. Often times, this one phone call can get you approved for your card.

Final Note

Many consumers are surprised to find themselves being rejected from certain credit cards. However, it’s important to note that with a few steps, this issue can be resolved in most cases. Simply call the creditor and ask them for any reasoning they may have for denying your application. Once you understand their reasoning, you can begin to create a series of goals that will help you get approved the next time around.



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