Does getting denied a credit card hurt your credit scores?

Getting denied for a credit card can be disappointing. But it won’t technically hurt your credit scores. Neither will a credit card approval, for that matter. 

But opening and closing a credit card account—including the hard credit inquiry that results from applying—are related steps that could affect your credit scores. Learn more about the process, plus ways to increase your approval chances. 

What you’ll learn:

• A credit card denial or approval won’t hurt your credit scores because those decisions aren’t reflected in credit reports.

• A hard inquiry from a card application can cause a temporary small drop in your credit scores.

• When making approval decisions, card issuers use credit reports and credit scores to determine creditworthiness.

• Getting pre-approved can show you Capital One cards that you may qualify for and won’t require a hard inquiry.

A lender’s decision to approve or deny your card application doesn’t affect your credit scores. That’s because application decisions aren’t reported to credit bureaus to be part of credit reports, which influence credit scores.

But when a lender checks your credit report after you apply for credit, the hard inquiry may cause your scores to drop by a few points. If a rejection leads you to apply for multiple cards, that would mean more hard inquiries. And multiple hard inquiries over a short period could have more of an impact on credit scores.

One way to avoid unnecessary hard inquiries on your credit reports is by checking whether you’re pre-qualified or pre-approved for a credit card. That can give you an idea of how likely you are to be approved if you take the next step and apply for a card. 

You can learn about getting pre-approved with Capital One before you apply. Checking requires only a soft inquiry rather than a hard inquiry, so it won’t hurt your credit scores.

Issuers determine for themselves whether to deny a credit card application. 

A positive credit history and good credit scores may show issuers you have experience using credit responsibly. Low credit scores and derogatory marks on your credit report might have the opposite effect. 

Issuers might also consider things like your employment status, income and debt-to-income ratio. If you’ve had a previous account with the issuer, they might consider that too.

If your credit card application is rejected, there are a few steps you can take to prepare before you apply again:

• Find out why. If your credit card application is declined, you have the right to know why. The Equal Credit Opportunity Act (ECOA) requires issuers to give applicants an adverse action notice explaining why their credit card application was denied.

• Work on the issues in your adverse action notice. You can use the specifics from your notice to address issues before reapplying. For example, if the denial was due to a negative payment history, you could try making consistent on-time payments moving forward.

• Try a different approach. If a lack of credit history is making it difficult to get a traditional credit card, you could consider applying for a secured credit card. Becoming an authorized user on the account of a trusted friend or family member might be another option.

Here are examples of responsible behaviors that could help you build your credit:

• Pay your bills on time. Payment history is an important factor in calculating credit scores. You could consider setting up automatic payments to help you make payments on time. Catching up on missed and late payments could also help. 

• Stay well below your credit limits. The Consumer Financial Protection Bureau (CFPB) says, “Keeping a low credit utilization ratio—under 30%—shows lenders you’re responsible and have available credit.”

• Consider your balances. The CFPB also says you should pay as much of your credit card balance as possible every month. That can help you stay below your credit limits and pay less in interest than if you carry over your balance month after month.

• Apply only for the credit you need. “If you apply for a lot of credit over a short period of time, it may appear to lenders that your economic circumstances have changed negatively,” the CFPB says.

It won’t build credit on its own, but monitoring your credit reports can help you spot opportunities for improvement and even catch mistakes. You can get free copies of your credit reports from AnnualCreditReport.com. And with CreditWise from Capital One, you can access your TransUnion® credit report without hurting your scores. CreditWise is free for everyone. You don’t even have to be a Capital One customer to use it.

A credit card application might be rejected for a variety of reasons. But getting denied for a card doesn’t directly hurt your credit scores. Rather, it’s the hard credit inquiry from applying in the first place that may lower your scores. 

You may be able to avoid rejections by comparing Capital One credit cards and checking for pre-approval offers before you even apply. Pre-approval is quick, and it won’t hurt your credit scores. You could also learn how to:

• Earn unlimited 1.5% cash back on every purchase, every day, with a cash back credit card.

• Explore Capital One credit cards for building credit with responsible use.