If you are denied for a secured credit card, you could apply for a different secured card (one with a higher approval rate), become an authorized user on someone else’s credit card account, or apply for a credit-builder loan. Some secured credit cards don’t even check your credit when you apply. So you will only be denied if you do not have a U.S. mailing address, a Social Security number (or Individual Taxpayer Identification Number), or enough money to fund your deposit and make monthly payments.
In general, secured credit cards are much easier to get than unsecured cards because they require a refundable deposit that also serves as your credit limit. Because there’s less risk for the issuer, secured cards are able to offer nearly guaranteed approval, even to people with damaged credit. But that doesn’t mean everyone is accepted, and some secured cards are easier to get than others.
Typically, if you’re denied for a secured credit card, the card’s issuer will send you a letter explaining why. That can be a good place to start when determining your next steps.
What to do if you’re denied for a secured credit card:
Apply somewhere else. Just because you didn’t meet one credit card company’s requirements doesn’t necessarily mean you’re disqualified from every secured card on the market. In particular, make sure to check out credit cards with no credit check.
Become an authorized user. If someone adds you to their account as an authorized user, you’ll get a card and be able to make charges, but the primary cardholder will be responsible for paying the bills. And if they pay on time, your credit standing will improve.
Apply for a credit-builder loan. Many credit unions and banks offer small loans to help people build or rebuild their credit. Much like a secured card, you’ll need to make a deposit when you apply for a so-called credit-builder loan.
Focus on your open accounts. If you have a mortgage, student loan, auto loan, or line of credit, making your payments on time will help build up your credit score. That will make it easier to get approved for a credit card.
Why was I denied for a secured credit card?
The most common reasons people are denied for a secured credit card include having a bankruptcy or tax lien on their credit report, not having enough income to meet their monthly obligations, and having an extremely low credit score. Past delinquencies with the issuing bank, current delinquencies anywhere, and invalid application information could all be reasons as well.
The specifics vary by card, though. So, if you were denied for a secured credit card, don’t lose hope. Just apply for one of the several secured cards with no credit check, and manage your account responsibly once you’re approved. You can also sign up for WalletHub’s free credit analysis for additional help getting your credit score back on track.