ou hear a lot about the importance of your credit score, and that is one of the primary things lenders look at to determine if you qualify. One of things that can have a serious impact on your credit score is becoming a victim of identity theft. Realizing this negative impact, in 2003 a new law to combat identity theft was enacted: The Fair and Accurate Credit Transactions Act of 2003, more commonly known as FACTA.
When you don’t succeed at something on the first attempt, what’s the first thought that runs through your mind? For me, it’s to try again. If I hit a bad shot on the golf course, my immediate reaction is to drop an extra golf ball (or three) and try the shot again. If I lose at a video game, I want another crack at it right away. Back when I was in school, if I messed up on an assignment, I wanted to redo it and turn it in again.
If you can’t tell, I’m impatient and don’t like not getting what I want. In many cases (especially the ones I listed), being impatient won’t have a negative impact. However, that isn’t always the case.
Have you ever applied for a credit card and later found out you were denied? If not, you’re lucky, because it happens probably more than you realize. This is one of the situations where having a little patience could pay off big time in the end. If you ever find yourself in the unlucky position of getting declined credit, here are some tips to follow.
Be patient. I can’t stress this one enough. Guys, this isn’t like that time back in high school where your persistence paid off. I’m talking about the time you pestered that girl to go out with you so many times that she finally surrendered and went out with you for one date. In this instance, persistence does NOT pay off. The more credit card applications you submit, the more likely it is that you’ll be turned down again. The more inquiries that show up on your credit report, the more desperate you look.
Read the adverse action letter. An adverse action letter is another name for a rejection letter. A law that’s now in place as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, requires lenders to provide consumers with a copy of their credit score and the reason for the rejection. If it’s something related to your credit report, you’re permitted to a free copy of your credit report to check for inaccuracies.
Look over the free credit report. If you were denied due to information on your report, you get 60 days to request a free copy of your report. Once you have your report in hand, check it over to ensure everything is accurate.
Report inaccuracies. If you come across information that you believe to be untrue or out of date, request that it be updated. Write a letter to the credit card bureau and include copies of documents that support your side. After completing this step, the credit bureau has one month to investigate your claim.
Repair. You could have been denied for a handful of reasons including bad credit, unpaid collections, or high credit card balances, to name a few. These are things that need to be fixed before you’re able to get a credit card.
Apply for a secured credit card. To get your hands on one of these, you’ll pay a security deposit up front that is stored in a savings account. The security deposit is only used if you default on your card payment. If you go an extended period of time (usually 6-12 months), some card issuers will turn your secured credit card into an unsecured credit card.
It’s no fun receiving a rejection letter in the mail. To prevent that from happening, follow the above steps.
If you’ve ever been rejected from opening an account, what steps did you take to get the card you wanted? Let us know in the comments section below!