What to Do if You’re Denied a Secured Credit Card

If you have a damaged credit history, or no credit history at all, a secured credit card can give you a chance to build or rebuild your credit. You apply for the card and, if approved, put down a cash deposit as collateral for the account. Usually, your security deposit will equal your credit limit amount.

But just because you apply for a secured credit card doesn’t mean you’ll get one. The lender might have concerns about your income level or your ability to pay bills on time, or might ding you for filing for bankruptcy in the past.

What happens if your application is rejected? Here are the steps to take so you can still work toward a better credit history.

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Find Out Why You Were Declined

Thanks to the Fair Credit Reporting Act, you have the right to know if information in your credit report prevented you from being granted credit, insurance or employment.1 Contact the lender for an explanation of their decision.

If something on your credit report led to a rejection, carefully look over your report for errors. You are entitled to one free credit report per year from each of the three major credit bureaus. If you see any incorrect information, dispute the errors.

There Are Other Ways to Build Credit

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 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 could help build your credit.2

If your parent, spouse or partner is a responsible user of credit cards, they could help you build your own credit history. They can add you as an authorized user of one of their credit cards, which will show up on your credit report and help you.

The catch? Your actions will affect each other. If the cardholder pays late, maxes out her card or racks up debt, it makes you look bad. Likewise, if you do those things, it negatively affects the cardholder’s credit. And the cardholder (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.3

Know Your Options

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 re-apply for a secured credit card.


1FTC.gov, “A Summary of Your Rights Under the Fair Credit Reporting Act,”

2Nerd Wallet, “What to Do If You’re Denied a Secured Credit Card,” March 2016

3Credit Karma, “How Does Being an Authorized User Affect My Credit,” March 2016

Legal Disclaimer: The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. 

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