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. 

Some parts of the application process could affect your credit scores, though. Learn more about the process, plus ways to help increase your odds of approval. 

What you’ll learn:

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

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

• 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 makes no difference to your credit scores. That’s because credit bureaus keep track of your open credit accounts.

It’s the act of the lender checking your credit report after you apply for credit that may cause your score 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 check whether you're pre-approved for some of Capital One’s credit cards before you submit an application. And because checking requires only a soft inquiry, it won’t hurt your credit scores.

Each card issuer has its own credit policies that help it decide whether to approve or deny a credit card application. They may consider things like an applicant’s employment status, income and debt-to-income ratio. If the issuer has previous experience with an applicant, that might be considered as well. 

A positive credit history and good credit scores may show that you have experience using credit responsibly. That means doing things like making your payment on time every month. Low credit scores and derogatory marks on your credit report might have the opposite effect.

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

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.”

• Pay your credit card balances in full. The CFPB also says that you should always pay as much of your full credit card balance as you can. 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 explains. So try to apply for credit only when you need it.

• Try a different approach. If a lack of credit history is making it tough to get a credit card, you could explore becoming an authorized user on the account of a trusted friend or family member. You could also consider applying for a traditional card for people with little to no credit. A secured credit card may be an option as well.

• Monitor your credit. Keeping tabs on 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 credit card doesn’t directly hurt your credit scores. Rather, it’s the act of applying in the first place that may lower your credit scores. 

You may be able to avoid rejections by getting pre-approved for a Capital One card before you even apply. It’s 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’s credit cards for building credit with responsible use.