Martin Meissner/AP/File
Credit and bank cards with electronic chips in Gelsenkirchen, Germany.

Why applying for the wrong credit cards can make bad credit worse

We’ll take a look at why applying for a lot of credit cards in a short time is bad for your credit, and what you should do instead.

If you have bad credit, figuring out which credit cards are right for someone with a credit history like yours is especially important. That’s because applying for the wrong cards and getting turned down can damage your credit even further, making it even harder to qualify for any card at all.

We’ll take a look at why applying for a lot of credit cards in a short time is bad for your credit, and what you should do instead.

How too many applications can hurt you

In most situations, persistence is rewarded. You might think you should respond to a credit card denial by filling out another application or three. But that’s the last thing you should do.

A flurry of credit card applications can damage your creditworthiness in a couple of ways.

First, each time you apply for a credit card, or any other line of credit, the lender will check your credit history. That hard inquiry shows up on your credit history, and each one knocks a few points off your score. If your credit is good, losing a few points temporarily isn’t a big deal. But if your credit score is already low, dropping it a few more points can be painful. If you apply for several cards in a row, the damage to your score can really add up.

The other way it can damage your credit is a bit harder to quantify. Credit card issuers and other prospective lenders don’t look just at your credit scores; they look at your full credit history. They want to know things like what kinds of loans you’ve taken out and how well you’ve managed debt. They also want to know who else you’ve asked for credit recently. Seeing that you asked five or six other banks for a credit card in the past six months, without successfully opening a new account with any of them, is going to give them pause.

The right way to respond to rejection

When you’ve been turned down for a credit card, you might not be very interested in talking to the company that denied you. But it’s important to find out why it turned you down. Maybe it was because of your income, and you can apply again once your work situation has improved. Maybe it was because of your credit scores, but perhaps the issuer has another credit card designed for people in exactly your situation.

Credit card issuers are required to send you an “adverse action notice,” explaining why they turned you down. Keep an eye on your inbox and your physical mailbox after you apply, but also be prepared to call them up and ask them to explain anything that doesn’t make sense to you. It’s possible that you were denied because of a misunderstanding, or because you or the person who processed your application entered some of your information incorrectly. If that’s the case, correcting the error may persuade the bank to accept your application after all.

Find a good credit card for bad credit

In many cases, applicants are denied because they’ve applied for the wrong card. Some cards are available only to people with good or excellent credit. That’s something to aspire to — once you rebuild your credit. For now, if you have bad credit, you should focus on credit cards for bad credit.

Your best bet may be a secured credit card. With these cards, you put down a security deposit, and you’re given a line of credit that’s usually equal to the deposit. Look for one with low fees, and make sure the one you choose reports account activity to the credit bureaus. That way, your good behavior will actually result in improved credit.

Virginia C. McGuire is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @vcmcguire.

This story originally appeared on NerdWallet.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to

QR Code to Why applying for the wrong credit cards can make bad credit worse
Read this article in
QR Code to Subscription page
Start your subscription today