If you apply for a credit card and get denied does it affect your credit

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• Being rejected for a credit card won't cause great harm to your credit score. You'll likely see an initial ding to your score due to a hard inquiry being placed on your credit report, but the impact won't last for more than a few months.
• If you're denied for a credit card you wanted to use to earn rewards, you should see which other cards you might be approved for.
• Also look for ways to maximize the cards you already have, whether that means taking advantage of bonus categories, shopping through portals, or signing up for a rewards-themed dining program.
• If you need to borrow money, also consider alternatives to credit cards, including ones that might come with a much lower interest rate. Personal loans are popular with consumers since they offer fixed interest rates, fixed monthly payments, and a fixed repayment timeline.

Applying for a credit card can be an exciting experience, and that's especially true when you're staring down a new travel or rewards credit card that's offering a juicy sign-up bonus. Unfortunately, we don't always get what we want in this life, and it's pretty common to get rejected for a credit card you want — even if your credit score is excellent.

I've been there, and I know how much it stings. For example, I was recently denied for the Delta SkyMiles® Reserve American Express Card even though I have excellent credit and zero debt. American Express cited the fact that I have had too many new credit cards in the recent past as basis for my denial.

Fortunately, being rejected for a credit card won't lead to long-term damage to your credit score. The only potential impact to your score is the result from a hard inquiry on your credit report, which is added to your report each time you apply for a line of credit like a credit card or loan.

According to credit-reporting agency Experian, hard inquiries on your credit report typically only ding your credit score for a few months, and this is despite the fact they can stay on your report for up to two years. Too many hard inquiries on your credit reports within a short length of time can do more harm than just one hard inquiry, however, since this warns lenders that you may be desperate to borrow money you may not be able to pay back.

What to do when you're rejected for a credit card

While being rejected for a credit card won't irreparably harm your credit score, not getting the card you want can definitely. be disappointing. Fortunately, there are some steps you can take to set yourself up for success next time. If you're rejected for a credit card, here are a few next steps.

Wait it out

If you applied for a new credit card and received a rejection due to having too many credit cards in the recent past, your best bet is simply waiting it out for six months or longer before you apply for another card.

If you were eager to earn a sign-up bonus and disappointed the bonus you wanted is no longer on the table, figure out ways to utilize the rewards credit cards you have instead. That could mean finding creative ways to rack up more points, such as going through a shopping portal when you buy something online, joining an airline's dining rewards program, utilizing bonus categories, or putting more of your purchases on credit.

If you were applying for a credit card because you wanted to consolidate high-interest debt or you need to borrow money, you can also consider alternative products like a personal loan.

Make sure you're paying all your bills on time

If your credit score isn't as great as it could be, you should also spend time figuring out ways to improve it. Since your payment history is the most important factor that makes up your FICO score, at 35%, this is a good place to start.

Make sure you're paying all your bills early or on time, and the credit bureaus will hopefully reward you with a higher score as a result of your timely payments.

Pay off some of your debts

The second most important factor that makes up your FICO score is the amount of debt you owe in relation to your credit limits, or your credit utilization. This factor makes up another 30% of your FICO score, so you have the potential to improve your credit if you take debt repayment seriously.

Most experts suggest keeping your credit utilization below 30% for the best results, which would mean maintaining balances of $3,000 or less for every $10,000 in open credit available to you.

Fortunately, paying off debt comes with other benefits. Yes, you can boost your credit score, but you can also save money on interest and free up cash you can use to save or invest.

Read up on card issuer rules regarding approvals

Finally, make sure you're not applying for credit cards you were unlikely to get approved for in the first place. For example, Chase has a rule, called the 5/24 rule, that says you typically cannot get approved for one of its credit cards if you have had more than five new credit card accounts within the last 24 months. If you have picked up 15 new cards within the last two years, then applying for the Chase Sapphire Preferred® Card is likely a lost cause due to this rule.

Citi has a similar rule for its co-branded American Airlines credit cards and bank cards like the Citi Premier® Card and Citi Prestige® Card <desc> <g id="asterisk" stroke="none" stroke-width="1" fill="none" fill-rule="evenodd"> <path d="M29.37 0a5 5 0 014.975 4.805l.004.216-.074 17.076 16.857-9.732a5 5 0 015.196 8.542l-.196.119-16.316 9.42 16.316 9.42a5 5 0 01-4.799 8.77l-.2-.11-16.929-9.774-.07 16.27a5 5 0 01-9.996.175l-.003-.217.065-15.519-15.7 9.065a5 5 0 01-5.195-8.542l.196-.119 16.315-9.42-16.315-9.42a5 5 0 014.8-8.77l.2.11 15.776 9.11.072-16.496A5 5 0 0129.37 0z" fill="#111"> </path></g> </desc> . This rule states that you can't get approved for one of their cards within the same family until you haven't had a card in that family for 24 or 48 months. If you have the Citi Premier already, for example, you can't apply for the Citi Prestige until you've canceled your Citi Premier and waited for 24 months. A similar but longer 48-month rule applies to some (but not all) of their American Airlines credit cards.

In addition to watching out for card issuer rules, also make sure you're only applying for cards you're likely to get approved for based on your credit score. If you know your credit score is around 600 and you apply for a credit card that asks for "good or excellent" credit, for example, you shouldn't be surprised when your request is denied outright.

In that case, you should look for credit cards for fair or average credit, then use your card as a tool to boost your credit rating over time.

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Holly Johnson

Freelance Writer

Holly Johnson is a credit card expert, award-winning writer, and mother of two who is obsessed with frugality, budgeting, and travel. In addition to serving as contributing editor for The Simple Dollar and writing for publications such as Bankrate, U.S. News and World Report Travel, and Travel Pulse, Johnson owns Club Thrifty and is the co-author of "Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love."

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