If you've been denied for credit, you're not alone.
About 24% of Americans without a credit card say that not qualifying is the primary reason they don't have a card, according to a survey of about 2,200 U.S. adults that CNBC Select performed in conjunction with Morning Consult in May 2019.
It's a bit worrisome that nearly than one in four Americans can't get approved for a credit card — especially considering the push toward a cashless society. However, there are actions you can take to increase the chances you qualify for a credit card.
Below, CNBC Select lists common reasons you may be denied for a credit card and how you can improve your approval odds.
Reasons you may be denied for a credit card
Insufficient credit history
If you have a short or nonexistent credit history, you may not qualify for a credit card. This can be frustrating if you're looking to build credit, but there are still options available, such as secured cards, credit-builder loans and becoming an authorized user.
Low income or unemployed
If you don't have a substantial source of income — or none at all — you may struggle to be approved for a credit card.
Missed payments
Having poor payment history is an indicator that you may not be able to repay the credit lenders extend.
You're carrying debt
Lenders may not look favorably upon applicants who are carrying debt. If you carry a balance month-to-month, it indicates to lenders that they may not be paid right away and you could default.
Too many credit inquiries
If you have too many inquiries on your credit report, especially within a short period of time, lenders may be hesitant to grant you credit. Since there's no specific number of inquiries that's considered too many, simply try to limit new inquiries.
Don't meet age requirements
The CARD Act of 2009 prohibits card issuers from extending credit to applicants under 21, unless the applicants apply with a co-signer or show proof of independent income. If you don't meet these requirements, ask a family member to add you as an authorized user to their card until you're able to open your own account.
There are errors on your credit report
Having unauthorized accounts on your credit report or other errors, can hurt your approval chances. Check you credit report for free at AnnualCreditReport.com and dispute any errors you find.
How to improve your approval chances for a credit card
Become an authorized user
A simple and liability-free way to build credit is to have a family member or friend add you to their credit card account as an authorized user. You'll be able to use the card like any other card to make purchases and won't be responsible for paying the bill. Before becoming an authorized user, just make sure the family member or friend has good credit so you can piggyback off positive, not negative, credit. (And make sure you practice responsible habits as well, so you don't negatively impact their credit.)
Pay off debt
Work toward eliminating any existing debt you carry month-to-month. Some options to pay off debt include opening a personal loan or asking a family member or friend for a loan. Once you build credit, you can consider a balance transfer credit card.
Improve payment history
Payment history is the most important factor of your credit score, comprising a whopping 35% of FICO Scores. As a result, it's key you make on-time payments every month. If you struggle to make on-time payments, consider adjusting your spending or setting up autopay for at least the minimum due. This ensures you avoid late payment fees, high penalty interest rates and negative information on your credit report.
Check your credit score and report
There are dozens of free credit score services available today, so there's no excuse not to check. Plus, no harm is done to your credit. You should check your credit score on a monthly basis, and before you apply for credit know which products you may qualify for. In addition, you should review your credit report at AnnualCreditReport.com. Each year, you receive one free report from each major credit bureau (Experian, Equifax and TransUnion). We recommend spacing out one report every four months.
Apply for a secured credit card
Credit newbies or people with less than stellar credit scores may have better chances at qualifying for a secured credit card, such as the Discover it® Secured Credit Card, compared to regular credit cards. A secured card is a great way to build credit and can be used just like an unsecured (regular) card in that you receive a credit limit, can incur interest charges and may even earn rewards. You have to make a security deposit in order to receive a line of credit for secured cards. (Check out CNBC Select's roundup of the top secured cards here.)
Be patient
Improving credit takes time and you won't see changes happen overnight. As long as you consistently practice responsible credit behavior, you should be on the road to good credit.
Don't miss:Here's how being denied for a credit card impacts your credit score
For rates and fees of the Discover it® Secured Credit Card, click here.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
FAQs
Common reasons applicants are denied credit cards include low credit scores, no credit history, inadequate ratio of income vs. expenses, and not meeting minimum age requirements. There are alternatives to standard credit cards to consider if you keep getting denied for credit cards.
Why is no one approving me for a credit card? ›
If you don't have a substantial source of income — or none at all — you may struggle to be approved for a credit card. Having poor payment history is an indicator that you may not be able to repay the credit lenders extend. Lenders may not look favorably upon applicants who are carrying debt.
Why did Bank of America deny credit card? ›
Factors that often result in a denial include: Too many recent hard credit inquiries. Lack of any banking or investment accounts with Bank of America. Too many existing Bank of America credit card accounts.
What percentage of Americans don't have a credit card? ›
Here's Why That's a Problem. There are several serious drawbacks to not having a credit card.
Can I reapply for a credit card after being denied? ›
If you were denied for a credit card, you still have options. You can wait a few months and apply for a card with a lower credit score requirement, or you can continue to work on your score and reapply down the line. Here are some tops to improve your chances of being approved after a credit card denial.
What credit card is the easiest to get? ›
Easiest credit cards to get: Summary
- Best for fair credit: Capital One QuicksilverOne Cash Rewards Credit Card.
- Best for students: Chase Freedom Rise℠
- Best secured card: Secured Chime Credit Builder Visa® Credit Card.
- Best for bad credit: Capital One Quicksilver Secured Cash Rewards Credit Card.
The three main reasons credit card transactions are declined are 1) the funds are unavailable, 2) incorrect security code, or 3) billing address does not match. Please contact your credit card vendor to see why the transaction was declined.
Why no one is giving me credit card? ›
Your credit score determines your creditworthiness. If you have a low credit score, your Credit Card application can get rejected. There are multiple reasons for low credit scores; these include delay in EMI payment, debt, defaulting on repayment of previous loans, and others.
Why won't Capital One approve me? ›
Some common reasons for not getting approved for a credit card include: Having a low credit score. Having too much debt. Having too many hard inquiries on your credit reports.
Why do I not qualify for a credit card? ›
One of the most common reasons people are rejected for a credit card — even people with good credit — is a high debt-to-income ratio. Age. If you're under 21, you'll face income requirements mandated by the federal government. Too eager for credit.
The bank has implemented several measures to mitigate various risks, and its regulatory compliance program is robust. While there are always risks involved in the banking industry, Bank of America does not appear to be in imminent danger of collapse.
What is the Bank of America scandal? ›
The CFPB has taken numerous actions against Bank of America for violating federal law. In July 2023, the CFPB and the Office of the Comptroller of the Currency (OCC) ordered Bank of America to pay over $200 million for illegally charging junk fees, withholding credit card rewards, and opening fake accounts.
What is the most used credit card in the world? ›
Most Common Types of Credit Cards
Of the four main types of credit cards—Visa, Mastercard, American Express and Discover—Visa is by far the most common, making up 58.3% of cards in circulation.
Who owns the most credit cards? ›
Credit card ownership by race
| Race/ethnicity | Share of adults with a credit card |
|---|
| Asian | 92% |
| White | 87% |
| Hispanic | 73% |
| Black | 71% |
Dec 21, 2023
$5,000 in credit card debt can be quite costly in the long run. That's especially the case if you only make minimum payments each month. However, you don't have to accept decades of credit card debt.
Is it hard to get approved for a credit card with no credit? ›
It's possible to get a credit card with no credit. You might consider applying for a secured credit card, student credit card or retail store credit card to help establish and build your credit.
Why is my credit score so low when I don't have a credit card? ›
Your credit score could be low when you have no credit card because your credit report includes a missed payment from a loan or a debt in collections. Any derogatory mark on your credit report can cause a low score when you have limited credit history, which may be the case if you don't have a credit card.
Why is my credit score high but still rejected? ›
Maybe you have a bad financial association and too much existing debt. Perhaps your salary is listed differently in two records, or you once missed a credit card repayment. It could be tricky to pin down the cause of a denied credit card or loan application, even with a good credit score.
What credit card do I get if I don't have a credit score? ›
No credit score is required to apply for Discover it® Student Cash Back, Discover it® Student Chrome, and Discover it® Secured Credit Card. Discover will consider information you include on your application and provided by others to determine your eligibility.
