Credit Application Was Declined and What You Can Do
It doesn’t matter if you’re applying for a credit card or some type of loan (such as for a car or home), you hope to receive an immediate approval that allows you to move forward with your plans.
Unfortunately, this doesn’t always happen. It’s possible your credit application could be denied, thus causing you to change your course and learn more about what went wrong.
As disappointing as a denial may be, it’s important to find out why as to improve your situation and avoid a similar outcome in the future.
Pinpoint the Cause
The first thing you should do after a credit application denial is pinpoint the cause. Some of the more common reasons for this include:
- No credit history or a short credit history
- Bad credit score
- Too much debt
- Insufficient income
- High debt to income ratio
- Unemployment or spotty job history
Tip: don’t hesitate to contact the credit card issuer or lender for more information. They’re more than willing to review your application with you, answer your questions, and help you understand the reason for the denial.
What To Do Next
Once you know why your credit application was denied it’s time to take action. The steps you take should be based largely on the reason for the denial.
For example, if you have a bad credit score, here are some things you can do:
- Pay down current credit card and loan balances
- Do whatever it takes to make payments on time in the future
- Keep a steady job
- Leave old debt on your credit report
- Don’t obsess over making fast progress (it takes time to succeed)
When you do these things, you’ll soon find your credit score on the rise. While it can take many months to reach your end goal of a good credit score, it’s well worth the effort and wait.
Once you address the reason for your denial, you can feel confident in pushing forward.
Forget about what happened before and turn your attention to the future. For instance, if your previous credit card application was denied, do the following:
- Make a list of the credit cards that you currently qualify for
- Compare the benefits and features of each offer
- Learn more about the application process, including what the issuer considers in regards to requirements
From there, you can once again submit an application. Since you’ve made changes for the better, there’s a greater chance of receiving an approval this time around.
Don’t Give Up
It never feels good to learn that your credit application was declined. This can take a toll on your mental state, while also zapping the energy you’ve been putting into your finances.
Giving up is the easy thing to do, but this won’t improve your financial situation.
When you stick with your plan – as outlined above – you’ll soon find yourself closing in on an approval. Once this happens, you’ll look back and realize that your original challenge was a blessing in disguise. You’re now in a much better position!