How to reapply for credit after you've been denied

Applying for credit cards and navigating the world of credit can be difficult – especially when your credit card application gets rejected. You lose out on the card and terms you were after, and now have a hard inquiry on your report, which may make it more difficult to get approved moving forward.

It can seem like an uphill battle at times, and you may want to give up. However, the time period immediately after your application gets denied is the best time to keep moving; taking steps to improve your credit score or adjust your desires to match your current score.

In any case, here are some tips to help you get back on track and reapply after your credit card application is denied.

First and foremost, you’ll want to find out why your application was denied. Thanks to the Fair Credit Reporting Act, credit card issuers have to notify you that your application was denied. If the credit card issuer used your credit report in their decision, the notice they send should also tell you which bureau provided the credit report and what credit score they used.

Understanding why your application was denied can help you make sure it will not happen again. For instance, if it seems your application was denied due to a score that highlighted your high credit usage, you can take steps to reduce your overall credit usage before applying again.

If you understand why your credit card application was denied, it may be a map towards getting your next application approved. Yet even if you are still uncertain why your application was denied, you can still take steps to improve your overall credit health and make it more likely you will be approved next time.

While there are no quick fixes to your credit score, it is crucial to be proactive and improve your overall credit health. Two of the most important factors here are payment history and credit utilization. Making every payment on time helps to build your credit score in the long term, and shows you are well-equipped to handle new credit.

Keeping your credit utilization low is equally important. Using too much of your available credit shows creditors you need to use that credit, which may appear risky. Most experts agree that about 25 to 30 percent credit utilization is ideal. So for every 1000 dollars of available credit, you should only use 300 at the most.

Additionally, check your reports for any errors and challenge them with either the reporting agency or the credit bureau themselves. Sometimes, removing one or two egregious errors can have a large impact on your credit score.

There is no hard and fast rule here, but you should generally wait before reapplying for a credit card after getting denied. Each situation is different, but the general rule of thumb is to wait about 6 months before reapplying. This also gives you plenty of time to focus on repairing your credit score.

This number may change based on other personal factors as well, such as:

For instance, if you have a very low credit score and get denied, it may be best to simply wait it out and take steps to repair your credit before moving forward. It may be more difficult in the short term, but in the long run it makes for a better relationship with your credit.

In some cases it may simply be that you are applying for a card that is not within your means or is outside your credit range. If your credit score is lower, you probably won’t qualify for many premium cards or offers, which is fine. Instead, focus on cards that can help you move towards a better financial future.

Secured cards can be very helpful in these situations, and many people who do not get approved for regular credit cards may have success getting approved for a secured card.

Secured cards typically require you to put down a cash deposit, usually of about 200 or 300 dollars to start. The institution then opens an account in your name for that amount, and you make payments to the card just like a regular credit card. This minimizes the risk for the lender, but also allows you to get some positive credit history and help repair your credit.

Balance transfer cards are another option for people who have other credit card debts. Balance transfer cards will generally offer introductory specials such as ) percent APR on transferred debts, so you can work to pay down your debt and get more positive history on your reports.

While not all credit cards will offer preapproval, doing a bit of research can make all the difference here. Looking into the requirements for the cards you are after and comparing those requirements to your personal credit reports can help you identify your chances of getting approved for certain offers or general terms.

Obviously you should always look to apply for a credit card that is well within your credit range to increase your likelihood of being approved.

While a denied credit card application can feel embarrassing, don’t give up. Credit cards can be a big part of your positive credit history if you can build healthy habits.

It can seem easier to settle for a card with worse terms, in many cases it may be better to simply wait it out. Other credit options exist which may both open up a line of credit for you and help you improve your credit report.

In any case, taking steps to improve your financial situation as soon as possible may lead you to the financial future you desire.