So you just got a rejection letter in the mail regarding the credit card you applied for a few weeks back. Now the question becomes, how long should you wait before applying for another card? This can often be a burden, especially if the first try did not go so smooth. In order to make the process easier, you need to understand how and why you got denied in the first place.
Why Creditors Usually Deny Credit Card Applications
The first thing you need to do is make sure that the credit card company denied your application for a legitimate reason. Although mistakes of this type aren't usually made by creditors, they can happen. When you get rejected you are, by law, supposed to receive two different documents: the first document details the exact reason why you were turned down; the second document should provide you with the information of the credit bureau that provided the information to the issuer. If anything appears to be inaccurate within those reports, then you should follow up as soon as possible (this information is likely impacting your finances in many ways that you may not realize). Get your credit report from that same credit bureau and look over what they have done and why they have done it. If you find an error, make sure to have the false information modified or removed altogether. Then send back the new application to that same creditor explaining where you found the error and how you changed it. If you do not find anything that misrepresents your credit standing, you may also try to appeal the application; however, this process has a relatively low rate of success and that time would be better served working on ways to rebuild your credit score.
For information regarding how a credit score is developed please visit our blog post about what all those credit scores & terms mean.
It is also important to note that creditors encourage signs of previous responsibility. Make sure to show any previous experience in this area by making regular payments on old or bad debts - this helps them feel like you're good for the money no matter how old your debts may be.
Preventing Denied Credit Card Applications in the Future
There are steps you can take in order to make sure that you prevent these troubles from happening in the future. A few examples are:
- Pay your bills on time. If you have had trouble with bills recently, then get caught up.
- Pay off any debt you may have instead of shifting that debt around.
- Make sure you stay aware of your credit score. By constantly managing your score, you can stay in control.
Click here for more information about improving your credit score.
How Long Should I Wait Before I Apply for a Credit Card Again?
This leads back to how long you should wait before reapplying for a credit card after being denied the first time around. Understand the guidelines that the company has set out when applying for the card; because each company is different there isn't a hard and fast rule, but wait at least 90 days to allow any of your credit rebuilding efforts to post to your credit reports. When you reapply, make sure that the credit card's target credit rating is within your credit limit (more on credit scores...) That could be the original reason why it was denied. If this is the case, then instead of reapplying for same that card, you may consider apply for a credit card in a lower tier..
If you have gotten turned down for a credit card, do not continue to reapply numerous times for that card over and over again. First see if any mistakes were made, and if so, correct them. If not, then look to another company for a credit card. If you get denied by multiple companies, then stop applying and examine your credit score - 9 times out of 10 this is where the problem is occurring. Use the time you would normally be using for applications (typically 90 days for the same card) to start to raise your credit score. Pay off debt, catch up with any outstanding bills, and refocus your financial situation. The extra time it takes to restore your credit, may be worth the wait. Because using up all your time, just to get rejected for the credit card can become tiresome and pointless.
Phillip Sunders
Team Your Credit Network