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 applying for a credit card generates a hard inquiry, which could affect your credit scores regardless of approval. 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.

• Seeing if you’ll be approved for Capital One card offers won’t require a hard inquiry or affect your credit scores.

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.

What could affect your credit scores is the credit card application itself. 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’ll be approved.

You can see if you’ll be approved for a Capital One card with 100% certainty. 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. Common reasons for a rejection include:

• Low credit scores

• Limited credit history

• Inadequate income

• High debt-to-income ratio

• Multiple recent hard inquiries

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 or whether you had a previous account with the issuer.

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.

• Advocate for yourself. Depending on the reason for the rejection, you may be able to appeal a denial with the issuer by providing more information, like additional sources of income you may have excluded from your original application.

• 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 get approved for a credit card:

• 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 for free without hurting your scores.

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. The hard credit inquiry from applying in the first place is what may lower your scores. 

You may be able to avoid rejections by comparing Capital One credit cards and seeing if you’ll be approved with 100% certainty. 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.