If a lender has rejected your credit application and you don’t know what to do, don’t despair.
Read through this guide and learn about the process of reconsideration that could turn your credit rejection into credit approval. You may think that going through the process of credit reconsideration is exhausting, but it doesn’t have to be.
If you know who to call and what to say, you can have the confidence to ask credit card companies to reconsider your credit application favorably.
What Is Credit Reconsideration?
A credit reconsideration is a very helpful recourse for credit consumers but unfortunately, many people are not aware of its existence. Majority of them just accept a credit application rejection with a shrug and move on through their credit journey.
The real score is, it is possible to get the lender to reverse a credit rejection.
With credit reconsideration, an applicant can call his credit provider and request that they go over his application once more.
In several cases, this would prompt the lender to reevaluate an application they previously denied and eventually grant approval after reconsideration.
If you are in that situation and you want to try a credit reconsideration, you can follow the process that we have outlined below.
When to Call The Reconsideration Line
You should first wait until the lender has formally denied you before calling.
However, if they ask you to call during the review process, then you should do so because they might ask some important questions or request for other supporting documents.
Sometimes, they just want to verify your identification. Normally, you will receive an official denial letter that would state the reason(s) why they refused your application.
Reconsideration Call Preparation
Card companies have different processes when it comes to reconsideration procedures and some issuers provide a special phone number for this purpose.
When a customer calls this number, he can escalate his request or talk to a representative to discuss the situation.
The representatives on the other line want a lot of detailed information so you need to have copies of your documents handy. You want to be able to answer the service agent’s questions accurately and confidently.
Here are the things you should think about before you call your credit card company:
1. Know Both Your Credit Score & Details of Your Credit Report
It is a basic necessity that you know your credit score before you apply for a credit card because different card issuers have different standards when it comes to credit scores.
For instance, premium cards like Chase Sapphire Preferred and Barclays Arrival will only approve if you have a credit score of at least 720+.
There are several ways to know your FICO score for free.
You can request a free copy of your credit report from each of the three credit bureaus once every year from annualcreditreport.com, which is a government supported site.
If you know your credit score and you have your credit report handy, you can have a more productive reconsideration call.
You will have accurate information on hand and can avoid making an embarrassing mistake when talking to the representative.
For example, you might find (while on the phone with the rep) that your report contains errors that caused your issuer to disapprove your application.
Your issuer may want you to include the following information:
- How much you pay for your monthly rent or mortgage payment.
- Reasons why some companies made credit inquiries for your account within the last year or two. (Perhaps you’ve refinanced your home, applied for an equity line for home repairs, or you bought a new car.)
- Your total household income for the current or past year.
- Some applicants report that having government-issued Employer Identification Number (EIN) helped in getting a business card.
- A proof of your role in the business (for example, an official document with your name and the name of the business, such as your articles of incorporation).
- A proof of your business income such as sales and profit figures.
- Your tax returns (business and personal) for the past year.
You should also be ready with a satisfactory explanation of why you are applying for a particular credit card. Maybe you want it to track your business expenses, or to keep your travel expenses separate from your other expenses, etc.
If you are applying for another credit card within 30 days, you should have a good explanation ready.
3. Understand The Reason For The Denial
Check the issuer’s rejection letter and look for the reason they gave, and then be ready to present your case. It could be a simple negative item on your credit report due to a late payment from two years ago.
Over the phone, you could politely explain why it happened, then you can confidently lay down your argument for having proven you are now a more responsible cardholder since then.
Or maybe due to a typo, you have left out a zero on your monthly income, making it as $500 instead of $5,000.
Or maybe the issuer turned you down because of a recent string of hard inquiries on your credit report. You can explain these kinds of entries on your credit report if you have the necessary facts.
Tips For Reconsideration Phone Calls
It’s but natural for first-time callers to the reconsideration line to be a little nervous. So, we have compiled some great tips to help you.
If you let a full month pass before you call the reconsideration line, you will have to start all over again with the application process.
This will not only be inconvenient on your part, but it will also trigger another hard credit pull on your credit history. If the bank denied your application, you should call the reconsideration line at once.
Have a Game Plan
If you already have several cards from one issuer, they are more likely to give you a new card but not necessarily grant you more credit.
In practice, they would most probably ask you to move some of your credit from one card to the new card that you are applying for. They might also ask you to retire an old card and use the credit line from that card for the new one.
Decide in advance which card(s) you would prefer to move some credit from or which one you’d be willing to give up.
Don’t volunteer to do this if they do not ask you, but don’t go in without first settling this in your mind.
Be prepared with your answers to these questions should they come up because somehow, it helps move the rep to approve your request.
Creditors (and their representatives) do not want to lend to people who appear to be disorganized, uninformed, or unsure of what they want to do.
Here are some points that you could bring up.
- Errors on your application or credit reports. As we’ve mentioned before, you should bring up any errors that you may have noticed in your documents if you think that they played a part in your credit denial.
- The amount of credit that you already have. The credit issuers often deny applications based on the amount of credit they are willing to grant and not the number of cards that you have. If you want a new credit card but are happy with the same amount of credit that you currently have, just ask the rep to move credit from an existing card to the card you have applied for. You can also ask the rep to close an existing credit card and have the new card as a replacement especially if the new card has better perks.
- Cite the benefits of various cards to you. If you want to keep all your cards, don’t offer to move credit around or close a card right away. Instead, tell the agent why you need to keep each card by citing their benefits to you. For example, you can say that one card has advantages for traveling while another card gives you additional points because of their tie-up with your favorite store. Make sure that the rep gets to know this, and don’t hesitate to give the details of how the perks work for you.
If Your Call is Going Nowhere, Hang Up And Call Back
One big mistake that applicants make is panicking and thinking that they need to decide on the spot. That is not true!
If your reconsideration call is going nowhere, either because the representative refuses to listen to you, seems decided to decline your appeal, or simply doesn’t get what arguments you are presenting, then just thank him, hang up, and then, try again.
There are hundreds of customer service representatives out there, and you don’t have to stick with the one who will waste your time, ruin your day, or won’t help you at all. Remember that you don’t have to agree to anything at that moment.
Hang up the phone, collect yourself, and try again. You’ll thank us later if you follow this advice.
Things You Should NOT Say in a Reconsideration Call
Don’t say that you want the sign-up bonus on the card as your main reason for applying for it.
It gives the impression to the issuer that you intend to toss the card aside after you’ve complied with the required bonus spend. They will likely conclude that you won’t be giving them good business later.
And they’ll think you’re trying to take advantage of the system. It paints a picture of someone who wants to outsmart the company and not a candidate for a loyal customer.
These things would make your chances for approval very, very low.
Instead, try to do this. Be patient and polite right from the start. Although you may become nervous, try to keep calm because it usually results in a good call. Remind yourself to keep your cool even if the questions become intrusive or border on rudeness.
It’s almost instinctive to become flustered and aggravated especially when you’re talking about money and credit. Try to remember that being level-headed could help you get a positive reconsideration.
Still Denied, What Next?
If your issuer still denies your application after you’ve gone through this process and followed all the tips, you still have other options.
You can try to apply for other credit cards either with the same issuer or from other card companies. If the reason for your denial was your credit history, try to look for a card that is more fit with your current credit standing.
You may see that you can get approval and even “pre-approval” with other types of cards but avoid the temptation of sending in too many credit applications all at once.
Every credit application will launch a credit inquiry that will affect your credit score negatively.
Applying for numerous credit cards in a short span of time will seriously impact your credit score and may adversely affect you from gaining credit in the future.
Therefore, be prudent with your credit applications and apply the lessons of this guide during your credit journey. There is always the possibility that you may have to resort to a reconsideration call in the future.