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).
There are several companies that say they provide free credit report services. However, very few actually do, or there’s always a catch–aka a fee–attached to it. Fortunately, AnnualCreditReport.com is the only website that allows you to access your credit reports from all three credit reporting bureaus for free once a year.
Checking your credit report is a great way to review your credit history and ensure that your identity hasn’t been compromised. Go to AnnualCreditReport.com to get a free copy of your credit report now!
A credit score is typically a three-digit number based on your financial history to analyze and determine your creditworthiness. The higher your score, the better off you are! Credit scores are used by lenders (banks, credit card companies, etc) to gage your financial responsibility based on your past financial behaviors. Credit scores are calculated from information in your credit report. Things that affect your credit score, both positively and negatively, are paying bills late or on time, the type of credit you use, how much credit you have available to you, how much you owe on your credit cards and loans, how long you’ve held outstanding credit (how long you’ve had a credit card, for example), and whether you’ve had a lot of inquiries from prospective lenders. Continue reading →