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Some people worry about what a declined credit card application will do to their credit score. Find out why it actually isn’t as bad as it may seem.
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It’s always disappointing to get declined for a credit card. For starters, you aren’t getting the card you want, after spending time picking it out and completing an application. You might also be worried about what that denied application is going to do to your credit score. Fortunately, even though this is a common concern, it’s not going to do any damage.
The credit card application affects your credit score, but getting declined doesn’t
Getting declined for a credit card doesn’t affect your credit score at all. It’s not part of the criteria used to calculate your credit score. Here’s the criteria for your FICO® Score, which is the most widely used credit score by lenders, and how heavily each one is weighted:
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Payment history (35%)Amounts owed (30%)Length of credit history (15%)Credit mix (10%)New credit (10%)
What affects your credit score is the credit card application, not the denial. The application puts what’s called a hard credit check, also known as a hard inquiry, on your credit file. A hard inquiry is a request made by a lender or business to review your credit history. This request gets recorded on your credit file. It’s part of the “new credit” category under the credit scoring criteria.
New credit only makes up a small part of your credit score. As such, a single hard inquiry won’t make much of an impact. Most people see their FICO® Score drop less than five points from a hard inquiry. A hard inquiry will normally only affect your credit score for one year, and it comes off your credit report after two years.
So, when you apply for a credit card, it can have a small impact on your credit score. But this has nothing to do with whether your application is approved or denied.
What to do if your credit card application is denied
It’s sometimes possible to get a denied credit card application overturned. To see if this is an option, call the credit card issuer, explain what happened, and ask if your application can be reconsidered. Whether this works will depend primarily on:
The reason your application was declined. Some issues, such as having a much lower credit score than the card issuer wants, are deal breakers. With others, there may be more wiggle room.The representative who takes your call. Some representatives are more lenient than others when it comes to reconsiderations. I’ve had one representative tell me no, called back, and talked to another who had no problem approving me for the card I wanted.
There’s no guarantee you’ll be successful. But you have nothing to lose by trying, so if you really want the card, then it’s worth a shot.
When you apply for credit cards in the future, make sure to look for cards that fit your current credit profile. If you haven’t already, learn how to find out your credit score so you know where you stand. Then, stick to credit cards that are in your credit score range or below. For example, if you have a low credit score, it wouldn’t make sense to apply for cards aimed at consumers with good credit.
Here are some of the top card options for consumers in each score range:
Credit cards for excellent creditCredit cards for good creditCredit cards for fair creditCredit cards for bad credit
Even if getting declined for a credit card is frustrating, it’s not actually that big a deal. You could potentially get that denial overturned. If not, there are plenty of other great credit cards available. Best of all, your credit score won’t be affected by the denial.
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