Rejection hurts, whether you’ve been shot down for a date, rebuffed by a 2-year-old who would rather play with her doll than you, or told “no” by a credit card company.
Rejection hurts. Take note of the specifics on why you were rejected to turn things around.
Yes, rejection is psychologically jarring, but it always pays to keep the bigger picture in mind. For all the “no’s” in your life, there will be plenty of times you’ll hear “yes” too. When it comes to your credit, however, you may wonder if credit rejections affect your score.
It may make you feel a bit better to know that the number of times you’re rejected for a credit card or loan doesn’t directly figure into your credit score. What does impact your score, however, is the number of new credit applications you make.
Credit scoring algorithms do take into account the number and frequency of your attempts to get credit. Too many applications in a short time frame can negatively impact your score. And don’t think getting every one of those applications approved is better for your score than getting rejected.
Not only will too many applications impact your score, too many newly opened accounts can throw off your credit utilization ratio. Plus, the more credit you have available, the more tempted you may be to use it, and potentially max out your credit cards.
The good news is that even if you get turned down for a credit card, lenders have to provide you with the top four factors that influenced that decision. Knowing the specific reasons a credit card company or lender rejected you can help you decide what steps you need to take – such as improving your credit score – to ensure it doesn’t happen again.