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

3 min read

Last Updated: May 10, 2023

Table of contents

Key Takeaways

You have the right to know why you were denied a secured credit card.
You can take action to correct any issues that led to the denial of your credit card application.
Credit report monitoring can help you learn when to apply for a secured card again.

If your application for a secured credit card is rejected, you have a legal right to know why you were denied. There are a few options you can explore to build your credit history.

While secured credit cards are a great option for those who have bad or nonexistent credit, you’re not guaranteed approval. Even the required cash deposit as collateral doesn’t always help. The lender might have concerns about:

Your income
Your outstanding credit card debt
Your ability to pay bills on time
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 Fair Credit Reporting Act. The credit card issuer must send you a letter giving details for denying your application. You can also get a free copy of your credit report when you’re denied for credit, and the letter should explain how to get your report from a credit bureau.

If something on your credit report led to a rejection, 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

If there weren’t any errors on your credit report, you’ll need to find another way to build up your credit history. Over time, you could put yourself in a better position to reapply for a secured credit card.

A credit union may offer several credit-building services

A share-secured loan functions like a secured credit card: you deposit money into a savings account and borrow against that money.
A credit-builder loan is a small loan that you can pay back in installments.

Both credit-building options may help build your credit history.

Become an authorized user

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 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.

Did you know?

You can check 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.²

See If You're Pre-Approved

3. Monitor your credit report

Federal law allows you to receive one free credit report every 12 months from each of the three major credit reporting agencies. The FTC reports that the three credit bureaus have permanently extended the program to include one free report per week.

You can request your free credit report at AnnualCreditReport.com (the only website authorized by the federal government).

The bottom line

Don’t lose hope if a credit card company denies your credit application for a secured credit card. Make sure your credit report is error-free and explore the other options to boost your credit score. Monitor your reports until your credit improves and try applying for a secured credit card again.

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