What is a Decline Reason?

People get declined for credit all the time. Your writer is no exception (include pictures to declined credit card applications on the side). What does this mean and what are the next steps for you?

It’s No Big Deal

There is a very small negative hit on your credit report associated with a decline. This usually amounts to a ~2-6 point decrease in your FICO (a common credit score of your risk). Focusing on the negatives is not the appropriate mindset though. Think about it: would you rather be accepting for a bad credit card or try to shoot for one that provides sufficient rewards? Being declined is just a sign that you are shooting for the appropriately difficult credit cards.

Better Cards Are More Difficult to Get Approved For

Most of the major cards do not have an annual fee (Chase Freedom, Capital One VentureOne, Discover It, American Express Everyday, American Express Blue Cash Everyday, Bank of American Cash Rewards). These credit cards usually come with more substantial rewards on purchases and a higher credit limit. Because they are so favorable for consumers, they need to be extremely low risk for the bank. This means they are more difficult to obtain. This does not matter for the average consumer though.

Getting declined for a card may feel like losing a hot streak

What Next?

After receiving the polite reasons about why the bank declined you in the mail, the basics of your personal finance and budgeting does not change. You should still spend less than you earn, still try to maximize rewards, still invest for the long term, still try to pay down expensive debt. If you continue on this route and save enough money, the short-term decline does not matter in the long run. 

It is better to be declined for a card that would help your personal finances than be approved for a credit card that would work against it.