What to Do If Your Credit Card Application Gets Denied

If you’ve applied for a credit card but your application has been denied, don’t be discouraged. That doesn’t have to be the last word on your ability to get a credit card.

In fact, here are 6 ways you can start improving your creditworthiness and increase your chances of credit card approval the next time you apply.

1. Find out why your credit application was denied. After a credit card application is denied, you’ll receive what’s called an adverse action notice. Common reasons for denial include insufficient income, missed payments and a high balance on an existing credit card.
2. Make sure your credit report is accurate. If your application was denied by the card issuer or lender due to information in your credit report, you have 60 days after you receive the adverse action notice to request a free copy of your report. Read through your report carefully to make sure you understand and agree with all the information being reported and that no fraud or identity theft has occurred.
   
   It’s a good idea to keep tabs on your credit beyond just when you’re applying for a credit card. That way, when you need a loan or a credit card, you won’t be surprised by anything you find. Your credit score is calculated using the details in your credit report. Having a low credit score can influence the interest rates on future loans, among other things.
   
   You can get a free credit report each week from the 3 major credit bureaus, Equifax®, Experian® and TransUnion®, at AnnualCreditReport.com.
3. Fix errors and address roadblocks to building credit. 34% of consumers have found an error in their credit report. If you find any errors, you can dispute them in writing with the credit bureau. And don’t forget—you may have made an error yourself. Review the information on the credit card application you submitted to the credit card company to see if you made any mistakes on the income or expenses you listed.
4. Apply for a secured card. If you’re a first-time borrower or have poor credit, a secured credit card from a financial institution like Navy Federal Credit Union may be the answer. Secured credit cards require a security deposit equal to the amount of your available credit. They’re available through most major credit card issuers. They can be used wherever unsecured credit cards are accepted. Using a secured credit card to establish or improve your credit score can be really effective, but make sure you confirm that the credit issuer will report your activity to the 3 major consumer credit bureaus first.
   
   As you develop smart money habits and good credit, like consistently making on-time payments and checking the accuracy of your credit report, you’ll be on track for a traditional credit card in no time. And with Navy Federal’s free Mission: Credit Confidence® dashboard, you can easily monitor your credit score, view your credit report, set goals, track your progress and get real-time notifications.
5. Enrich your credit history with everyday expenses. One way you could help build your credit profile is by using the recurring payment reporting tool powered by Bloom+, available within Navy Federal’s digital banking.^{Footnote 1} You could build your credit history by using this feature to report up to 5 payments you’re already making, like rent, utilities and phone bills. These payments aren’t automatically reported to the eligible credit bureau,^{Footnote 2} but after linking the reporting tool to your Navy Federal accounts, they will be. Plus, you have full control over which bills get reported.
6. Get help if you need it. If you need help getting your finances in order, a personal finance counselor may be able to help. Navy Federal counselors are available at select branches, or you can speak with someone over the phone—all at no cost.