Having a credit card is quite common in the U.S because of the financial convenience that comes with meeting your urgent financial needs before your paycheck arrives. It is thus no surprise that so many Americans apply for credit cards, but what happens if you do not qualify for one?
The Federal Reserve conducted a study in 2016, and it found that roughly 17% of credit card applicants were unqualified, and their application declined. What happens if you are one of the denied applicants and where do you go from there?
Go through a reconsideration line
Consider going through the credit card issuer’s reconciliation line if your first application is turned down. Doing this might yield a favourable outcome because the reconciliation line will allow you to communicate with an actual human representative and not a bot. The representative will likely evaluate your application and point out why it was denied.
Income concerns are often the reason for credit card application denial but knowing this gives you a chance to contest through your household income.
Review your credit reports
A low credit score and credit report might be the reason for your declined application, and if that is the case, they will list the reason for the denial letter. If you genuinely have a low credit score, then you need to work on improving it. Evaluate your credit report through Experian, TransUnion and Equifax. You will get a free copy of your credit report if there was the reason for denial. Evaluate it check if there are any errors. If there are errors, then report them, and this may help you secure the loan.
Try a different credit card company
There is a sea of credit card firms out there some have a higher risk tolerance while others choose to lean on lower risk. Perhaps the reason for your declined application is that you are considered a high-risk applicant, but that does not have to be the end of it. You can try your luck with a different credit card company, especially those that do not demand excellent credit scores. If you do secure a credit card, then work on building your credit score.