denied for credit cardsMost people know the importance of establishing a positive credit history, and that failing to do so can severely limit your ability to get some of life’s accomplishments, like renting an apartment, opening a cell phone plan, qualifying for student loans or even buying a home. While having credit cards is an effective way to establish your credit history as well as boost your credit scores, unfortunately not everyone qualifies for them. So what can you do if your credit card application is denied? We’ve detailed a few steps you should take before you apply for another card.

Do not immediately apply for other cards

There’s no denying that being declined for a credit card is frustrating, but it’s essential you don’t go on an application frenzy. Although there is no set amount of time you need to wait before applying for another card, it’s generally recommended that you wait a couple months before submitting another credit card application, as multiple inquiries will not only have a negative impact on your credit scores, but also make you appear desperate to creditors, which doesn’t increase the likelihood of you getting a credit card. While you’re waiting to apply or re-apply for a credit card, it’s important you do everything you can to make sure your credit either improves or remains in good standing by doing things like paying your bills on time and keeping your other credit card balances low. Additionally, if you have any outstanding bills or bills in collections, you’ll want to set up a payment plan to start paying those debts off so that you can work on becoming more financially healthy.

Read your adverse action letter

If you applied for a credit card or a loan and you were denied, creditors and lenders are legally required under the Equal Credit Opportunity Act to send an adverse action letter to let you know why you were denied or disclose that you have the right to request reasons for denial within 60 days of receipt of creditor’s notification. The reasons detailed on the adverse action letter must be specific, like limited credit history, negative marks on your credit reports, too little income and outstanding debt.

It’s important to read this letter so you get a better understanding of whether it was something on your credit reports or your credit scores, or for some other reason, so that you know what steps to take moving forward. For example, if the letter notes it was due to an error on your credit reports, it will list which credit bureau reported the error so that you can contact them and start the process of removing the error from your credit report. Alternatively, if it has something to do with your credit standing, you can begin to take steps to start improving your credit scores by paying your bills on time, settling any debts in collections and even considering a secured credit card.

We know you’re likely thinking “you just told me to wait before I apply for another card, so why are you telling me to get a new card?” but it’s important for you to recognize that secured credit cards are not the same as traditional credit cards. That’s because secured credit cards are designed to help people rebuild credit as most of them report to all three of the credit bureaus (traditional cards usually only report to one or two). This makes them a perfect way for you to rebuild your credit for a few of months before you apply for another traditional credit card. Although secured credit cards can be used just like a traditional card — the merchant won’t know it’s secured — you should know that they function somewhat differently, as you have to put down a deposit in order to open the card. The deposit acts as a security measure in the event you default on the card, and the amount of the deposit varies depending on the card you select and your creditworthiness. There are a number of secured credit cards on the market — some of them, like the Discover it Secured card, even offer cash back rewards.

Check your credit reports

This is a step you should take before you apply for any credit card, but if you forgot to complete it before your first application, now’s the perfect time to do it. You may or may not know this, but you can actually check your credit reports once every 12 months for free. That’s right, the Fair Credit Reporting Act allows every American citizen to check their credit reports for free once a year through AnnualCreditReport.com, and this includes all three credit reports — Experian, Equifax and TransUnion. You also have the option to receive these reports individually if you don’t want to check all three at the same time. It should be noted that you’ll have to pay a fee to check your credit scores through AnnualCreditReport.com, but that may be changing soon. It’s extremely important to know what’s on your credit reports in the event that there are any errors, which could be affecting your eligibility to qualify for a credit card, as your credit reports determine the rating of your credit scores. If there are any errors on your credit reports, you can contact the credit bureau to dispute and remove the errors, or have a credit repair service help to do so on your behalf.

Something you may want to consider is looking into a credit monitoring service, which will provide you with regular copies of your credit reports and scores. Although you will have to pay a monthly fee to use most of these services (some come with a free trial), it might be worth paying since you’ll have the ability to know what your credit looks like at all times — something that’s essential if your credit history was the reason you were denied a credit card. Even if you only have the service for a couple of months until you rebuild your credit history, it’s likely worth the minor investment. And since most credit monitoring services include tools that allow you to see how certain financial moves, like paying off a credit card or applying for a new credit card, can impact your credit scores, you can discover the right moves for you to take to improve your credit health.

When it’s time, make sure you apply for the right credit card

Another important thing to consider if you’ve been denied for credit cards in the past is the type of credit cards you’re applying for. To help ensure you’ll get approved, you’ll want to apply for a credit card that fits your credit rating. For example, if you have average credit, you likely won’t be approved for credit cards that require applicants to have good or excellent credit. Because creditors run a hard inquiry on your credit reports when you apply for a new credit card, having too many hard inquiries on your credit report could begin to negatively affect your credit scores, which is why it’s essential to make sure you’re applying for a credit card that matches your credit rating.

Looking for a new credit card? We review a handful of cash back, travel rewards, low APR, balance transfer, student and business credit cards that fit different credit scores. Head over to our credit card reviews to see which option is best for you.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.