Does Credit Card Rejection Affect Your Credit Score?

Getting a rejection on a credit card application may be really disappointing and many people tend to apply again and again when their application isn’t approved. But, is it really a good idea to keep applying for credit cards until you finally get approved? This is a very important question that may come to your mind after getting rejected by a card issuer. Another important thing is to understand whether a credit card reaction affects your credit score or not. It’s actually a credit card application that affects your credit score and not the rejection. To understand the same in more details, keep reading the article:

Does The Rejection of a Credit Card Application Affect Your Credit Score?

Before you apply for a credit card or start your credit journey, you must understand what a credit score is and how it gets affected. There are five major factors that affect your credit score, including your payment behavior, your credit utilization ratio, your credit mix, the average age of your accounts, and the number of hard inquiries on your credit profile. Hard inquiry here refers to a credit check made by a card issuer or any financial institution when you apply for a credit card or a loan. Too many hard inquiries on your credit profile within a short period may have a really bad impact on your credit score. Therefore, if you apply for credit cards too often, it increases the number of hard inquiries, which further drops your credit score.

So, it is not about the approval or rejection of your credit card application, it’s just about the applications. The more you apply for credit, the more your credit score gets affected negatively. No matter whether your application gets approved or rejected, if you have applied for a credit card, there will be a hard inquiry and it may affect your credit.

What To Do?

If your credit card application has been rejected, don’t just apply for another credit card very soon after that. You should apply for at least 2-3 months before applying for another credit card/loan if you have already applied for one. When you keep applying very often, the card issuers may consider you a risky borrower who is very much in need of credit and may default on repayments. It is very essential to maintain your credit score in order to get approved for credit cards. So, you need to ensure that you are not ruining your credit profile by applying for multiple cards in a short span of time. Do it with patience and you will surely get approval once you build a good credit score.

How To Get a Credit Card When Application Is Getting Rejected every time?

If you think that your credit score has dropped really badly and it has become difficult for you to get approved for a credit card, just try to rebuild your score. You can start with a secured credit card that is issued against a fixed deposit. These types of cards do not need any credit score or income for approval. You just need to open an FD account with the issuer and you get a credit limit equivalent to the FD amount. Another option here is the Buy Now Pay Later facility being provided by various e-commerce companies and financial institutions. These are easier to get approved for and also help you build your credit history. Just use this credit responsibly and once you build a good credit history, you can start applying for the credit cards of your choice.

Bottom Line

Individuals have many wrong perceptions related to credit cards and this is also one such myth that credit card rejections affect your credit score. Not only rejections but even if you apply and get approved, there will be a hard inquiry in your credit profile. So, just try to understand the whole credit score process first, including how it is calculated, what are all the factors affecting it, etc. Talking about the impact on your credit score due to rejections, just try to be patient and don’t apply for credit cards too often. It can affect your credit score badly and with a bad credit history, you will always find it challenging to get better credit offers and bigger loans. If you have any further doubts, feel free to write them down in the comment section!