Do Credit Card Declines Affect Your Credit Report?

Having a credit card application declined can not only be disappointing, but also might cause fear that the decline will make it even more difficult for you to get credit in the future. The declined credit card application will slightly affect your credit report, but not any more than an approved application would.

Decline Not Reported

Credit card companies do not notify the credit bureaus when they decline a credit card application. Therefore, your credit report will not state that you have had a declined application. Credit card companies and lenders you apply to in the future will have no idea that you have been declined by other lenders.

Credit Inquiry

Every time a creditor checks your credit report it generates a credit inquiry. Your credit report lists all of the creditors who have checked your credit recently in response to your application. Therefore, your declined credit card application will generate an inquiry that slightly reduces your score. However, the inquiry occurs before the credit decision is made, so it does not affect your score any more than it would have if you had been approved.

Score Effects

A credit inquiry usually reduces your score by five points or less. If you have a long credit history and many accounts, one inquiry might not affect your score at all. On the other hand, if you are new to credit and do not have much in your credit report, the inquiry will take off closer to five points, or maybe even a few more. Inquiries will not significantly affect your credit unless you have many inquiries during a very short time. Therefore it is best to space out credit applications.

Tips

After you have been declined for a credit card due to your credit score being too low, the lender must send you a notice telling you how to get a free copy of your credit report. Check the report for accuracy and make sure there is no incorrect information that is decreasing your score. You will then want to either wait at least a few months while you improve your score or choose a less-selective credit card company. If you have some cash on hand, you can apply for a secured credit card, which requires a deposit instead of credit history.