What happens if I get declined for credit?

So, you’ve gotten declined for a credit card…Now what?

Each time you apply for credit, whether it is a credit card or a loan, it is called a “hard inquiry.” This stays on your credit report for two years. While getting declined credit will not negatively impact your credit score or history, a bank or lender will look at the number of “hard inquiries” you have; the more you have, the riskier you are. However, it is important to note that if you are looking for specific types of credit, like an auto loan or a mortgage, multiple inquiries will count as only one for credit scores.

It’s also important to understand why you were declined in the first place. Reasons can include: having too low of an income, owning too many credit cards, a record of late payments, being in collections, or having limited credit history. If you are denied credit, a lender is required to tell you why within 60 days of your application being rejected according to the Equal Credit Opportunity Act (ECOA).

If you’re still interested in learning more about this topic, check out these resources: “Credit Inquiries: Hard Inquiries and Soft Inquiries” and “Choosing the right card and what happens to credit scores if you are declined.”

Written by Alex Ziskind & Andrea Pellegrini, University of Illinois USFSCO Student Money Management Center

iGrad

Personal finance is a more complicated topic than many realize. A recent study noted that most people in the world cannot answer three simple personal finance questions correctly. It also has become necessary to educate ourselves on personal finance on a continual basis due to the new tools and technology introduced in financial markets every day.

Fortunately, the University of Illinois has partnered with iGrad to provide a resource for you to expand your knowledge of financial topics. iGrad is an online financial literacy platform with a nine-module financial literacy course covering the following topics:

  • Financial Health
  • Smart Spending
  • Student Loans
  • Banking
  • Credit Cards
  • Credit Reports
  • Identity Theft
  • Your Paycheck
  • Investing

In addition to having a robust financial literacy course, iGrad contains hundreds of articles, infographics, resources, tools and videos to help you make a variety of financial decisions. Use your Illinois NetID and Enterprise password to get started.

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Written by Andrea Pellegrini, University of Illinois USFSCO Student Money Management Center