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What Can I Do if I’m Denied for a Secured Credit Card?

Last Updated: May 10, 2023
3 min read

Key points about: being denied for a secured credit card

  1. You have the right to know why you were denied for a secured credit card.

  2. You can take action to correct any issues that caused your credit card application to be denied.

  3. Monitoring your credit report can help you learn when to apply for a secured card again.

If your application for a secured credit card is rejected, find out why you were denied (you have the right to know) and explore your options to build your credit history.

Because while secured credit cards—which require a cash deposit as collateral for your account—are a great option for those who have bad or nonexistent credit, you’re not guaranteed approval. The lender might have concerns about your income or your ability to pay bills on time, or might not be able to approve you if you're currently in bankruptcy or recently filed for bankruptcy.

1. Check why you were denied for a secured card

You have the right to know if information in your credit report prevented you from being granted credit, insurance, or employment, according to the Federal Trade Commission. If you apply for a secured credit card (or any credit card) and are turned down, the credit card issuer is required to provide you with a letter explaining why your application was declined. You're also entitled to a free copy of your credit report when you’re denied for credit, and the letter should explain how to get your report.

If something on your credit report led to a rejection, carefully look over your report for errors. If you see any incorrect information, dispute the errors.

2. Correct the issue that got you denied for the secured credit card

Typically, a credit card company’s reasons for rejecting your application aren’t based in error—so you’ll need to find another way to build up your credit history. You have a few options.

Credit unions may offer several credit-building services. Share-secured loans function like secured credit cards (you deposit money into a savings account and borrow against that money), while credit-builder loans are small loans that you can pay back in timely installments. Both options may help build your credit history.

It’s also possible to build your own credit history as an authorized user on a credit card belonging to your parent, spouse, or partner. When you add a friend or family member as an Authorized User to your Discover® Card, you help them build a credit history with responsible use.2 This way, the creditor may report both the cardmember and the authorized user to the credit bureaus. The catch? Your actions can affect each other. If the cardmember pays late, maxes out their card, or racks up debt, it makes you look bad. Likewise, if you do those things, it negatively affects the cardmember’s credit. And the cardmember (not you) is responsible for any debt accumulated. So be careful with this route. Poor credit management could ruin two people’s credit—and it could hurt your relationship.

All hope is not lost if your application for a secured credit card is rejected. Make sure your credit report is error-free and explore the other options to boost your credit score. Over time, you could put yourself in a better position to reapply for a secured credit card.

Did you know?

See if you’re pre-approved for a Discover Card--it’s fast and easy. Fill out some basic information and you can see if you’re pre-approved with no harm to your credit score.4

3. Apply for a secured credit card again

According to the Federal Trade Commission, you can check your credit report for free once per week at each of the major credit reporting agencies–Equifax®, Experian®, and TransUnion®. Monitor your reports until your credit improves and try applying for a secured credit card again.

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  1. Build credit with responsible use: Discover reports your credit history to the three major credit bureaus so it can help build/rebuild your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build/rebuild credit.

  2. Authorized User: Primary account holder is responsible for all charges made by the Authorized User(s). Discover reports the account credit history to the three major credit bureaus as to you and the Authorized User. This can help build the Authorized User’s credit history if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact yours and the Authorized User’s ability to build credit.

  3. Minimum Security Deposit: If approved, you must make a minimum security deposit of $200 (or more, in increments of $100 up to $2,500), which will equal your requested credit limit. Discover will determine your maximum credit limit by your income and ability to pay.

  4. There is no hard inquiry to your credit report to check if you’re pre-approved. If you’re pre-approved, and you move forward with submitting an application for the credit card, it will result in a hard inquiry which may impact your credit score. Receiving a pre-approval offer does not guarantee approval. Applicants applying without a social security number are not eligible to receive pre-approval offers. Card applicants cannot be pre-approved for the NHL Discover Card.

  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.