Understanding Student Credit Card Denials and Next Steps (2024)

Key points about: Student credit card denials

  1. There are a wide range of reasons why credit card companies might deny an application for a student credit card.

  2. If your application for a student credit card was rejected, it’s important to determine the cause so that you can take appropriate follow-up steps.

  3. There are various strategies you can follow to improve your odds of being approved in the future, like using a secured card to build credit.

Common reasons for student credit card denial

If your application for a student credit card is declined, there's no need to worry or lose hope. The key is to find out why it was rejected. Understanding the reason can guide you to make adjustments that could enhance your prospects for approval in future attempts.

Student credit cards are typically designed with students in mind, but approval is not guaranteed. There are various factors that could lead to a denial, such as:

  • Having a high debt-to-income ratio
  • Not earning sufficient income to cover potential credit card bills
  • Not having a credit history
  • Having a poor credit score
  • Having a history of missed or late payments

The good news is that federal regulations require credit card companies to clarify why your application was denied. This means you'll have a clear understanding of the reasoning behind the decision. Later in this guide, we'll delve into what actions you can take following this feedback.

Can you be denied a credit card because of student loans? The answer depends on several factors, such as how your loans impact your overall debt-to-income ratio, as well as your history of missed or delinquent student loan payments. For example, card issuers might reject your application if your debt-to-income ratio suggests you may have too many obligations compared to your ability to repay. You may also be denied if your credit score is too low, which could occur if your credit score drops due to missing one or more student loan payments.

Impact of credit score on application outcomes for students

Many student card issuers are willing to approve applicants without established credit. For example, there is no credit score required to apply for a Discover It® Student Chrome credit card.1 However, if your credit score is low because of missed or defaulted payments on past loans or credit cards, your application is more likely to be rejected.

The role of income verification in credit approvals for students

If you are under the age of 21 when you apply for a credit card, the issuer may request and verify information about your income. If they decide that you might not be able to pay your credit card bills, your application could be denied. You don't necessarily need a high salary or a full-time job to apply. However, as a student, you do need to show that you have access to a steady income, such as money from a parent that is regularly deposited into your bank account or a part-time job.

Steps to take after you get a student credit card rejection

If your application was denied for a student credit card, there are actions you can take to improve your financial health—and with it, your likelihood of being approved in the future. After your application is turned down, two of the most important steps to follow are reviewing your rejection letter and checking your credit reports.

Step 1: Review the rejection letter

You don’t have to wonder why you got declined for a student credit card. Under federal law, the card issuer is required to transparently explain the reasoning in your rejection letter, also known as an adverse action letter. Be sure to read the letter carefully to learn why your application was denied. There may be corrective actions you can start taking right away, like working on reducing your debt-to-income ratio.

Step 2: Check credit reports

There may be an error on your credit report that caused or contributed to the denial of your application, such as missing or inaccurate information about a payment you made. You may also have been the victim of fraudulent activity, such as identity theft. To rule out these possibilities, it's wise to check your credit report for completeness and accuracy. You're entitled to one free annual copy of your credit report from each of the major credit bureaus whose websites also explain what to do if you locate an error on your report. Additionally, if you are denied for credit, your rejection letter will provide instructions on how to obtain a free copy of your credit report.

Preparing for future credit card applications

To reduce the chance of being denied for future credit cards or loans, it's important to have a thorough understanding of your financial situation. This is why reviewing your rejection letter and your free credit report is so beneficial. Additionally, choosing the right credit card before applying is important, as some cards have more demanding eligibility requirements than others. If you've been denied a student credit card, think about ways to build your credit history, such as making sure you pay all your bills promptly or using a secured card in a responsible manner.

Did you know?

Borrowers with little to no credit history or poor credit may struggle to qualify for an unsecured credit card. But credit card companies may have less requirements for secured cards because applicants provide a refundable security deposit. You may not even need a credit score to apply for a secured credit card. For example, there’s no credit score required to apply for a Discover it® Secured Card.2

Learn More

Building a strong credit history

Student credit cards are often available even to people with limited or no credit history. However, if you've already been denied due to your lack of credit history, it may be a good idea to look into ways to start building your credit. Some ways you can build a strong credit history include obtaining a credit-builder loan, obtaining a secured credit card, becoming an authorized user, and reviewing your credit report for errors. For more tips on boosting your creditworthiness, learn about building a credit history with a secured credit card from Discover.

Timing and strategy for future applications

When you apply for a credit card, a "hard inquiry" is triggered that may temporarily lower your credit score. Therefore, it's wise to wait at least six months between applications. It's also a good idea to check if you're pre-approved for any credit cards. If you're pre-approved, it typically means the card issuer has already determined that you meet at least some of the eligibility criteria.

Finally, remember to consider a secured credit card, like the Discover It® Secured Credit Card, as an alternative to student credit cards. Think of secured cards as training wheels for credit. They provide a safe space to practice responsible spending with a safety net (your deposit) while gradually building your creditworthiness.

See if you’re pre-approved

With no harm to your credit score3

Understanding Student Credit Card Denials and Next Steps (2024)

FAQs

Understanding Student Credit Card Denials and Next Steps? ›

If you've been denied a student credit card, think about ways to build your credit history, such as making sure you pay all your bills promptly or using a secured card in a responsible manner.

Why do I keep getting denied for student credit cards? ›

Student credit cards can be easier to get than other cards, but approval isn't guaranteed. Card issuers review the information on your application and check your credit history and income. You can be denied for a wide range of reasons, including poor credit or a lack of income.

How to get approved for a credit card when you keep getting denied? ›

Here are five ways to increase the odds that your next credit card application will be accepted:
  1. Use your current credit cards responsibly. ...
  2. Build your credit score. ...
  3. Monitor your credit reports. ...
  4. Get your timing right. ...
  5. Choose the best credit card for you.
Mar 4, 2024

How long do you have to wait after getting denied for a credit card? ›

Some card issuers also have policies of declining applications from consumers who recently submitted applications. As a general rule of thumb, consider waiting around three to six months before reapplying.

What is the first step to follow if you are denied credit? ›

First, find out what caused the lender to turn you down. If a lender rejects your application, it's required under the Equal Credit Opportunity Act (ECOA) to tell you the specific reasons your application was rejected or tell you that you have the right to learn the reasons if you ask within 60 days.

Why wasn't I approved for Capital One student card? ›

John Miller, Credit Cards Moderator

You don't meet the credit score requirements. You don't have enough income to afford the card's minimum payments. You have too much debt relative to your income. There's a recent delinquency or error on your credit report.

How hard is it to get approved for a student credit card? ›

Student credit cards are designed for college students and are generally easier to get than other kinds of credit cards. The issuer may ask for proof of enrollment and of your income. Depending on your age and income, you may need a co-signer to qualify.

Why do I keep getting denied when I have good credit? ›

You may also have a history of high credit utilization. If you consistently max out your credit cards, for example, issuers may be hesitant to offer you new credit even if you always make your payments on time. Or maybe you've applied for too much new credit within a short time period.

Is it OK to apply for another credit card after being denied? ›

Beverly Harzog, former CPA turned consumer advocate, explains that the amount of time you should wait in between credit applications depends on what else is in your credit. If you were rejected because of too many hard inquires, Harzog recommends you wait at least four to six months before applying, or possibly longer.

Can I challenge a credit card denial? ›

The reconsideration process includes a manual review of your credit report by an analyst with the bank or card issuer. This is your opportunity to answer some questions and see if you can turn that denial into an approval. Sometimes it's as simple as reallocating credit lines or submitting identity verification.

How to get reconsidered for a credit card? ›

Tips for Getting Your Credit Card Application Reconsidered
  1. Review your credit reports. ...
  2. Have a reconsideration angle in mind before you call the card issuer. ...
  3. Be as polite and helpful as you can be. ...
  4. Be willing to negotiate. ...
  5. Make sure your reason for wanting a new account is acceptable to the bank.
Dec 5, 2023

How many points do you lose when you get denied for a credit card? ›

Being denied for a credit card doesn't hurt your credit score.

Why am I getting denied for credit cards with no credit history? ›

If you are always declined in credit card applications, it's likely because you're applying for the wrong cards or have submitted too many applications in a short time. Factors like limited income, debt from loans, unpaid bills, or limited credit history could also prevent you from qualifying for certain cards.

Why did I get denied for Discover student card? ›

Student credit cards are typically designed with students in mind, but approval is not guaranteed. There are various factors that could lead to a denial, such as: Having a high debt-to-income ratio. Not earning sufficient income to cover potential credit card bills.

What are the only three reasons a person can be denied credit? ›

The reasons they give for rejecting your application must be specific, such as, “Your income is too low,” “You have not been working long enough,” or “You didn't receive enough points on our credit scoring system.”

What is the order of steps to the credit approval process? ›

The 5 basic steps of the loan approval process
  1. Step 1: Gathering and Submitting Application & Required Documentations. The first step in obtaining any loan is to complete an application and submit the required documents. ...
  2. Step 2: Loan Underwriting. ...
  3. Step 3: Decision & Pre-Closing. ...
  4. Step 4: Closing. ...
  5. Step 5: Post Closing.
Apr 24, 2024

Why did I not get approved for the Discover student Card? ›

Common reasons applicants are denied credit cards include low credit scores, no credit history, inadequate ratio of income vs. expenses, and not meeting minimum age requirements.

Why do I keep getting denied for student loans? ›

Lenders may look at your employment history, credit score, debt-to-income ratio, and enrollment status at your school. One of the most common reasons why a student might not qualify for a private student loan is because they don't meet their lender's FICO® Credit Score criteria.

Why do I keep getting denied for credit cards when I have no credit? ›

If you are always declined in credit card applications, it's likely because you're applying for the wrong cards or have submitted too many applications in a short time. Factors like limited income, debt from loans, unpaid bills, or limited credit history could also prevent you from qualifying for certain cards.

What credit score do you need for a student card? ›

Student credit cards are designed specifically for college students and don't usually require a credit score to qualify. This likely makes them the most appropriate credit card for students with no credit history.

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