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How to build credit if you've been denied a credit card

The best thing about your credit score is that it can be improved. Even if you’re denied a credit card there are steps you can take to turn things around.

April 20, 2023
 min read
Last updated:
Jan 12
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The gist: Building credit after a denial means reducing debt, checking your credit history and exploring the option of a secured card.

Being denied a credit card feels like a set back but it doesn’t need to be. Technology and regulations are giving consumers more power than they’ve ever had. As a result, you can access the information needed to understand why the denial occurred and start to build or rebuild your credit in a way that’s sustainable. 

What’s important is that you don't take the denial as something that is final. Here, we offer a few clear and simple steps you can take to improve your credit and get approved.

Reasons for a credit card denial

Credit card denials are often due to one of or a combination of the following reasons:

Low credit score

Your FICO score or VantageScore might be too low. Many major credit card issuers require a score of 670 or more for approval. Many credit cards with attractive perks including travel and cash back want to see a score of at least 640.

High credit utilization

You might be using too much of the credit that’s available to you. Your credit utilization ratio should be 30% or less. This number is a major factor in the calculation of your credit score. The lower it is, the better your score will be.

Excessive debt

Your debt-to-income (DTI) ratio is a single number that shows how much you owe compared to how much you earn. DTI requirements will vary among credit card companies but the lower your DTI, the more likely you are to be approved. Generally a DTI under 40% is preferred.

Credit history errors

Equifax, Experian, and TransUnion are each required to provide you one free credit report each year. Check the data on your report because errors are not uncommon. You can correct any false data by contacting the credit reporting company and explaining why it’s wrong and providing any supporting information you might have. 

What to do after a credit card denial

There are a few key steps that you should take in the following order after a credit card denial.

  1. Find out why

Credit card issuers must comply with the Equal Credit Opportunity Act which requires 

them to tell you the reason for any declined application within seven days. This is 

the first step because their reason will tell you what action you need to take next.

  1. Look at your credit report 

See if the reason provided by the credit card company matches the information on your 

credit report. This is a chance to see if the credit card company based their decision on 

inaccurate information. If so, you can request a reconsideration from the credit card 


  1. Focus on increasing your credit score

The credit card company’s most likely reason for a denial is a credit score that’s too low. 

A low score can be due to a range of factors like length of credit history, payment history, 

types of credit accounts, credit utilization, and recent credit inquiries. 

Impact of a credit card denial

A denial from a credit card company doesn’t hurt your score. However, when they review your application they initiate a credit check which is known as a hard inquiry. This does impact your score but will likely only bring it down by about 5 points.

Best ways to build credit after a credit card denial

There are a few quick ways to boost your credit even after a denial.

Get a secured card

A secured card is a type of credit card that requires a cash deposit which serves as collateral for the credit. The amount of the cash deposit is equal to the credit limit of the card. Getting approved is usually quick and easy since the issuer has the assurance of your deposit. 

Reduce your debt

As discussed above, your debt-to-income ratio matters to credit card companies. Try to reduce this number by limiting the purchases you make with your credit cards. Aim to bring your credit utilization below 30%.

Become an authorized user

When you become an authorized user on a credit card you have the possibility of benefitting from the main holder’s regular, on time payments. Before doing this, check to see if the credit card will report your cardholder status to the bureaus. 

Can I be denied a secured card?


A secured card is easier to get than a traditional credit card but you can still be denied on the basis of your credit history. Collections, bankruptcy, and repossessions are all reasons why you might be denied a secured card. You’ll also need to be sure that you have enough cash to cover the minimum deposit.

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Ben Taylor

Ben Taylor, MBA is a financial writer with work appearing in Business Insider, Nasdaq, Yahoo Finance, The Motley Fool, and Investopedia. He covers personal finance, and investing to help readers make informed decisions. He is the founder of Financial Content Management, which offers financial writing for sites focused on both retail investors or institutional investors. He lives outside Philadelphia.