What Can I Do if I’m Denied for a Secured Credit Card?
Key points about: being denied for a secured credit card
You have the right to know why you were denied for a secured credit card.
You can take action to correct any issues that caused your credit card application to be denied.
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 for building a better 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.
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.1 This way, the creditor will report both the cardmember and the authorized user to the credit bureaus. The catch? Your actions will 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.
3. Apply for a secured credit card again
It used to be that you were entitled to one free credit report per year from each of the three major credit bureaus. That has increased to one free credit report per week from each credit bureau through December 2023. Monitor your reports until your credit improves, and try applying for a secured credit card again.
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