12 Possible Reasons Your Credit Card Application Was Denied

Explanations for a Denied Credit Card Application

If you're approved for a credit card, you'll typically find out right away. When you're denied, however, it's a completely different situation. Credit card issuers rarely tell you on the spot why your credit card application was denied. Instead, they send a letter, an adverse action letter, within 7-10 business days of your application that gives more details about the decision.

The adverse action letter will give you the specific reason or reasons your credit card application was denied. The letter will also include instructions for getting a free copy of your credit report if one was used in the decision. While you’re waiting to get your letter, here are some possible reasons your credit card application could be denied. If you're familiar with your credit history, you may be able to guess why your application was denied.

Your loan balances are too high.

woman sitting on sofa reading bills
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If you haven’t been paying down your loan balances, credit card issuers are hesitant to give you a credit card because there's a risk you may not pay that off either. Reducing your loan balances before applying for a credit card can help you get approved.

Your credit card balances are too high.

Credit card companies want to see that you’re only using a portion of the credit available to you. If you’re using too much of your available credit, especially if you’re maxed out, you can count on having your credit card application denied. Keeping your balances below 30% is best for your credit score and your chances of getting approved.

There are too many inquiries on your credit report.

Applying for too many credit cards and loans within a short period of time can get your credit card application denied, regardless of whether you’re approved for the other credit cards. Minimize your credit inquiries to improve your chances at getting your next credit card application approved.

Your income is too low.

The income required for a credit card varies by credit card issuer. Your credit card application could be denied if you don’t make enough money for that particular credit card or if you don't have income of your own. Credit card issuers don't publish minimum income requirements for their credit cards, so it’s up to you to estimate which credit cards fit your income.

You have too many credit cards.

The number of credit cards you already have can influence whether your credit card application is denied. There’s no universal number that applies to all credit card applications. Instead, it varies by credit card issuer.

You have a recent collection or public record.

As time goes on, collections and public records affect your credit less. However, these hurt your credit the most when they first appear on your credit report. These serious delinquencies are a sign to the credit card company that you don’t have enough money to meet your financial obligations.

Your last delinquency was too recent.

Credit card issuers look at more than just the type of delinquency. They also consider how long it’s been since you were last delinquent. A 90-day late payment from six months ago will hurt your chances of getting approved more than one from six years ago.

You have a charge-off on your credit report.

A charge-off is a credit card balance that went unpaid for six months or more. It’s one of the worst things that can appear on your credit report. Honestly, if you failed to pay another credit card, a new credit card company will hesitate to give you a credit card. Paying the charged-off balance will improve your chances at getting approved.

You have a thin file or limited credit history.

You could be denied if you've never had credit before or if you don't have much experience with credit. If you don’t have at least one account that’s been active in the past six months, FICO can’t generate a credit score for you. Without a credit score, the credit card company is more likely to deny your application. If you're just starting out with credit, consider a secured credit card or student credit card.

You're not old enough to get a credit card.

If you’re under age 18, you’ll probably have your credit card application denied because you're under the legal age to get a credit card. There are some exception. For example, you may be able to get approved for a credit card if you have your own income and you’ve already been added as an authorized user to your parents’ credit card.

You didn't completely fill out the application.

If your application is missing vital information, like a physical address or date of birth, you risk being denied. The good thing about most online credit card applications is that they often won’t let you submit the application until it’s complete. That way, you eliminate the risk of having your credit card application denied because it wasn’t complete.

You haven't been at your current job long enough.

An unstable work history lead to your credit card application being denied. Credit card issuers like applicants who have been on their job consistently. If you’ve been job-hopping and have periods of unemployment, you may have a hard time getting approved for a credit card.

Improve Your Credit Before the Next Application

The adverse action letter will include instructions for ordering a free copy of your credit report, if something on your credit report led to your application's denial. Order the credit report and review it for any errors. Dispute errors with the credit bureau if you find any. Otherwise, use this free credit report as an opportunity to repair your credit before your next credit card application.