There are a lot of reasons you may get rejected for a credit card, some that have to do with your financial situation and some that do not. In fact, about a month ago, we wrote a blog on just that called… “top three reasons your credit card application was rejected”.
Now, in this blog, we want to do a little spin-off from that previous piece and discuss what happens next. Want to know what happens when you get rejected for a credit card and where to go from there?
Read on to find out.
Alright, so first off, getting rejected for a credit card is not the end of the world. Often, it seems that people believe or convince themselves that getting rejected for a credit card will be forever damning to their credit score and their future ability to obtain financial help through loans or buy a house or get good car insurance etc.
Thankfully, this is not the case.
The credit card denial, in and of itself, does not have a lasting impact on your credit score. It may impact your credit score slightly for a temporary period of time but your credit score will not be in the dumps simply because you were not accepted for a card. The reality of this misconception is that what actually lowers your credit score is the hard inquiry into your credit that occurs when you submit the application for a credit card. The result of the application, however, has no impact on the score – even if you are declined.
Furthermore, there are plenty of ways you can move forward from a credit card denial without feeling all too bad about not being accepted the first time around.
In other words, the answer to “what happens next” after a credit card denial is simple. Dust yourself off, pick yourself up and move on because as we said, denial is not a death sentence.
In fact, here are two things you can do to improve your chances of success when you apply for your next credit card.
- Avoid applying for your next card right away because, as we touched on earlier, every application for a credit card involves a “hard inquiry”, which actually does impact your credit score. Since consecutive inquiries over a short time can be a detriment to your credit score, it is advised that you wait a decent time until your next credit card application.
- Contact the entity that denied your credit card and ask why. Much like the point above, this is a good way to prepare yourself for your next credit card application because you will be able to find out where there were gaps in your application and find a way to fix them. Whether the gaps in your application and eligibility have to do with your credit score being too low, an error or delinquency on your credit file or some other mistake, there are plenty of ways to find out what went wrong in order to prepare yourself for next time.
There is no denying (sorry if that was a bad choice of words, too soon?) that getting a credit card is an important part of everyone’s personal financial journey, whether you are an adult reading this post now or whether you are reading this post thinking about your young child, who will be facing this reality soon.
We’ve got nationally and internationally-acclaimed programs in this area for children in grades one all the way to grade twelve, covering topics from the basics and history of money to the stock market and global finance, so we encourage you to check them out and sign your child up as soon as possible!