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Credit Cards

Steps to Take If You Are Declined a Credit Card

Updated Sep 21, 2021   |   8 mins read

If you are declined for a credit card, it is not necessarily the final word on that matter. There are several things you can do to possibly change the outcome, but it is important to first understand why you may have been declined.

In most cases, the immediate response you get when you are denied a credit card doesn’t refer to any specific reason. That usually comes in the form of an adverse action letter you receive within 7 to 10 business days.

The letter provides more specific reasons why your credit card application was denied along with instructions to follow for obtaining a free copy of your credit report. There are plenty of reasons for getting declined. We’ll go over some of the more common ones soon.

Credit Card Reconsideration Procedures by Company

American Express Reconsideration

American Express offers a phone line for checking on the application status or declined applications. You can call 800-567-1083 or 866-314-0237 to speak with a credit analyst. Credit analysts are empowered to make credit decision over the phone so you will be talking with the right person.

Chase Reconsideration

Chase’s reconsideration line is 888-270-2127 for personal cards and 800-452-9719 for business cards. Like AMEX, you will speak directly with a credit analyst who has the power to make credit decisions right over the phone.

Capital One Reconsideration

The line currently used for reconsideration calls at Capital One is (800) 625-7866. In checking some of the forums, it appears that Capital One is not very accommodating when it comes to reconsideration. Many callers say that the initial denial of credit is usually final. If you can’t get very far with the representative who takes your call, you could always ask for a supervisor.

Discover Reconsideration

You can try calling Discover for reconsideration at 888-676-3695, but this appears to be a general public line. Otherwise, Discover’s reconsideration line appears to be a closely guarded secret. Checking around on the forums, it seems that Discover doesn’t offer reconsideration by phone. Your best bet is to write a letter to the return address found on the rejection letter.

Many credit card issuers are not very forthcoming with their reconsideration phone lines, if they have one, so you may be bounced around a bit when you call the general line. Plus, it’s not unusual for companies to change their reconsideration lines periodically. If you can’t get satisfaction by phone, you should send a letter instead.

>> Read More: Credit card reconsideration

Common Reasons for Getting Declined

You Have Too Much Debt

If you are carrying too much debt, especially in relation to your income, creditors may view you as a high risk.

Your Credit Utilization Ratio is Too High

If you are using up too much of your available credit, creditors will be concerned you are not doing a good job managing your credit. Too much would be 40 percent or more of your available credit.

You Have Too Many Inquiries on Your Credit Report

If you apply for too many credit cards within a short period of time, creditors view you as a higher risk. Either it looks like you are desperate to get more credit, or you are trying to take on too much credit in general.

You Have Too Many Credit Cards

A creditor may determine you already have enough access to credit.

You Have Too Few Credit Cards

If you are very new to credit, with too short of a history, creditors may not be sure of your ability to manage more credit.

Your Income is Too Low

Your creditworthiness is based on your ability to repay. The creditor may deem your income too low relative to the amount of credit you have or are requesting.

You Have a Short or Unstable Job History

Creditors like job stability because it increases the likelihood they will be repaid. If you haven’t worked long enough or you’ve changed jobs frequently, it may concern creditors.

You Have Some Dings on Your Credit Report

Late payments (especially recent ones), collections, and other derogatory marks on your credit report are disqualifiers for most creditors.

You Have a Previous Charge-Off

When you are applying for a credit card, having a record of a previous charge-off from another credit card is a major red flag for a creditor.

What to Do When You Are Declined

When you apply for a credit card, all of these factors are screened by a computer algorithm that makes an instant decision on whether to approve or decline the application. Negative factors, such as delinquent payments, charge-offs, high credit utilization, and number of credit cards, are almost always taken into heavy consideration towards disqualification.

If you are declined due to one of these reasons, your chances of overturning the decision are slimmer than usual. Your better course of action would be to order your free credit report and start working to fix those problems.

For most derogatory marks that show up on your credit report, the best healer is time. Instances of delinquencies, charge-offs, and collections remain on your credit report for seven years. But, the more they recede into history, the better your chances of being approved for credit – as long as you keep your more recent history (1-2 years) clean.

If you are turned down due to high debt or credit card balances, you can turn things around as quickly as you can pay down your debt. Getting your credit utilization ratio down below 30 percent is a start. In fact, if that is the only reason for being declined, you could turn it around instantly by paying down your credit card balances immediately. As soon as your credit utilization ratio falls below 30 percent (preferably 25 percent) you could be approved.

It is also not at all uncommon to be declined for credit due to an error on your credit report. With your free credit report, you should thoroughly review every line to make sure your information is current and correct. It may not have current employment information, or you could find some reported activities that don’t belong to you.

You also want to make sure that positive credit activities are being reported. It’s not unusual for paid off debt balances to still show up on your report. This is especially important if any incorrect information results in a lower credit score. You can contact the credit bureaus and they are responsible for investigating mistakes and correcting them immediately.

Getting Your Application Reconsidered

If you think the credit card company was too hasty in making its decision – maybe it didn’t have a complete picture of your employment history or income, or you have an extenuating circumstance for a delinquent payment – you can take another shot with your application through a process called credit card reconsideration.

There is a little known regulation that requires credit card companies to reconsider your application upon request. The regulation states that creditors must consider “any information the applicant may present that tends to indicate the credit history being considered… does not accurately reflect the applicant’s creditworthiness.”

Reconsideration provides you the opportunity to engage with an actual human to present your case, which is good because humans are more empathetic and understanding than computers. However, if you are going to use reconsideration, you should have the information you need to refute or negotiate at the ready.

For instance, if you were turned down based on your income, you will want to provide information that shows you have other sources of income. You may want to use reconsideration to make your case that, even though you had a couple of delinquencies, they are more than two years in the past and your payment record has been perfect since. A computer may have rejected you for that, but a human might listen to reason, especially if it is presented politely and honestly.

You have two options for contacting the bank for reconsideration – mail or phone call. If you are presenting documentation, you should use the mail. Sometimes it’s easier to make a clear case in a well-written letter. Most banks offer a special phone line for reconsideration requests, but they don’t always make it very obvious.

The phone number provided on a rejection letter doesn’t always get you to the reconsideration phone line. Each credit card issuer has its own process for reconsideration and some are more transparent than others. Here’s how some of the top credit card issuers handle reconsideration.

>> Read More: How do credit cards work?