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What To Do if Your Credit Application is Rejected

On Behalf of | Nov 27, 2017 | Consumer Protection

With the holidays just around the corner, most consumers consider applying for credit to be able to have additional means to make purchases during this expensive time.  If you are one of the millions of consumers applying for credit and find that you are continually getting denied, don’t just accept the rejection.  Finding out why you have been denied a credit card or loan is within your rights under the Fair Credit Reporting Act (“FCRA”) and you deserve to know the reasons.

Take Immediate Action

When applying for a credit card online or by mail, the process is usually conducted by an automated system. If you have one item that is a reason for rejection, even if you should qualify, you can still be automatically rejected.  After receiving a denial, you should take action.  First, you need to determine why you received the rejection notice and, second, you need to request reconsideration.

Request a Free Credit Report

Under the FCRA, after you are denied credit, you are entitled to a free copy of your report from the credit reporting agency used to make the decision for denial.  After being denied credit, you should receive a denial letter listing the reasons for the denial and the name of the credit reporting agency used.  Requesting a copy of your report from this agency will give you a better idea of why you received the denial.  What you think is a poor credit mark may not matter as much to the creditors.

Reasons You May Have Been Denied

Sometimes consumers with a good credit score get turned down for credit and requesting a copy of your report can help explain why and what the lender was looking at when it made its decision.  For example, one reason a consumer with good credit can be denied is due to the number of accounts opened in a short period of time.  Another common reason for denial is a high debt to credit ratio.  If you are carrying high balances on a number of your accounts, even if you have never missed a payment, this may be a warning sign to creditors that you could be considered a credit risk.  You should not just assume what is causing the denial.

Reconsidering Your Application

Next, after viewing your report, ask the credit card company to reconsider your application.  In the event you have good credit but your application was still denied, reach out to the lender and ask for another chance.  In your denial letter, credit card companies usually list a contact number for reconsideration.  In the event you have good credit, your second chances for approval are pretty high.  In a request for reconsideration, you may be asked to explain a red flag in your report.  If you believe you should be approved and are a creditworthy consumer with good credit standing, make sure to give it a try.

If you believe your rights have been violated under the FCRA and you would like the advice or assistance of counsel, contact SmithMarco P.C. for a completely free case review.