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6 Ways to Avoid Getting Rejected for a Credit Card

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It can hurt to have your credit card application rejected. Not only will you be denied an account with the line of credit, rewards or benefits that you had hoped for, but it can feel like the card issuer has judged your entire financial worth, and found you unfit.

Thankfully, there are many parts of the credit card application process that are within your control — and several simple steps you can take to increase the chances of your application being approved.

Here are five things you can do to keep yourself from getting rejected for a credit card.

1. Apply for a Card Your Credit Can Qualify For

Just as students are counseled not to apply to elite colleges unless they have very high grades, there is no sense in applying for a credit card that requires an excellent credit history unless you have one. In general, different credit cards are designed to meet the needs of applicants that fall roughly into the following five groups: excellent (a 750+ credit score on a 300 to 850 scale), good (700 to 749), fair (650 to 699), poor (600 to 649) or bad credit (below 599).

Cards designed for those with the highest credit scores will typically offer the most favorable terms, like a lower interest rate or lucrative rewards program, while those made for applicants with lower scores will generally have higher rates and fewer benefits. To increase your chances of approval, find out your credit score in advance and apply for cards that are offered to those with your credit profile. (You can see how your credit currently fares by viewing two of your credit scores, updated each month, for free on Credit.com.)

2. Improve Your Credit Score

Of course, if your credit is in one of those lower aforementioned categories, you can up the odds of qualifying for better terms and conditions by taking steps to improve your score. You can generally fix your credit by disputing errors on your credit report, identifying your credit score killers and creating a game plan to address them.

3. Pay Down Debts Before You Apply  

One of the main reasons that card issuers will deny an application is due to the concern that you will not pay back the loan, especially if you have other debts. Yet some cardholders who appear to have debt on their credit report simply have statement balances from their cards that they plan on paying in full by the due date. That’s typically because issuers tend to report your balances as of your billing date and not the actual date payment is due.

To reduce this apparent debt, try paying off any balance first before the statement period closes, and then applying after the statement closes and a zero balance is reported to the consumer credit bureaus. You can contact your issuer if you’re unsure what dates might apply to your account.

4. State All Sources of Income

One of the issues that can work against applicants is how they state their income. In addition to reporting money earned from employment, applicants over 21 are generally also able to list non-employment sources such as investments, spousal and child support, retirement benefits, and government benefits. Also, the Consumer Financial Protection Bureau lifted restrictions against including a spouse’s income back in 2013. Under its guidance, you can include your spouse’s income if you have a reasonable expectation of access to it.

5. Don’t Apply for Too Many Cards

Another reason that some credit card applications are rejected — even when the applicant has a seemingly good credit score — is that the said applicant has too many recent applications for credit cards. To a card issuer, these multiple applications can be interpreted as a sign of possible financial difficulty. If you have already applied for several credit cards, or other loans, within the past few months, it might be best to wait a few more months before filling out new applications.

6. Ask for Reconsideration

When a credit card application is processed, it’s often a computer that makes the initial decision on whether to approve or deny it. And while most people will just accept this decision as final, you may be able to contact the card issuer and ask to have your application reconsidered. When you do this, you generally will be connected with an account manager who will hear from you why your application should be approved. You can cite a reason, such as your loyalty to the bank, while bolstering your application by supplying additional information such as other sources of income that you may have originally omitted.

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Image: Cathy Yeulet

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