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What is the penalty if you get rejected for a credit card?

New Visitor

What is the penalty if you get rejected for a credit card?

Just wondering if anyone knows how bad a hit it is to your credit if you apply for a card and are rejected.  My credit score is 700 and my husband wants to apply for a retailer card to get equipment we need to buy for his business, just wondering how many points you get taken off your score if they reject you.

Message 1 of 6
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Frequent Contributor

Re: What is the penalty if you get rejected for a credit card

There's no "penalty" for a rejection per se.  Any drop in points will come from the inquiry itself, but it depends on how many inquiries are already present from the past year.  I would say that if there aren't many recent inquires then you don't have much to worry about.

AMEX Blue Cash - $15k, Lowes/GECRB - $10K, PNC - $10K, CIti Diamond Preferred - $10K, Home Depot/Citi - $7590, Best Buy Store/HSBC - $7400, Citi Platinum Select - $7150, Best Buy RZMC/HSBC - $5750, Dillards/GECRB - $4350, Discover More - $3600, Cap 1 Cash Rewards - $3000, Amex HHonors - $2000, State Farm - $2000, Cap 1 MTV - $1500
Message 2 of 6
New Visitor

Re: What is the penalty if you get rejected for a credit card

Thanks!  Just out of curiosity, any idea what the hit is for the inquiry?  I seem to remember it being only a couple of points.

Message 3 of 6
Frequent Contributor

Re: What is the penalty if you get rejected for a credit card

It varies depending on the individual's credit profile as a whole.  My last 3 inquiries on TU didn't result in a change in score at all!  However, I think you are correct to expect a drop of a few points.  Nothing more than that though.

AMEX Blue Cash - $15k, Lowes/GECRB - $10K, PNC - $10K, CIti Diamond Preferred - $10K, Home Depot/Citi - $7590, Best Buy Store/HSBC - $7400, Citi Platinum Select - $7150, Best Buy RZMC/HSBC - $5750, Dillards/GECRB - $4350, Discover More - $3600, Cap 1 Cash Rewards - $3000, Amex HHonors - $2000, State Farm - $2000, Cap 1 MTV - $1500
Message 4 of 6
Established Contributor

Re: What is the penalty if you get rejected for a credit card

Typically an inquiry will hit your file with a 3-5 point drop.  But it will come back as it ages over the next year.  It has fairly minimal impact as far as your FICO score goes.  Where a lot of inquiries can become a problem is when the creditor you're applying with doesn't like them.  Creditors that typically are touchy with INQs are Amex, Citibank, Chase, and Penfed.  But there is so much that is looked at regarding an application for credit that it's hard to pinpoint what my trigger a decline.  If it's something that your hubby needs I would give it a shot and not worry about the temporary point drop.

CCs: Chase Freedom VS 12.9k, CSP VISA Sg 13k, BofA Amex 24.5k, Discover 12.5k, US Bank Cash+ Visa Sg 17k, Macy's Amex 8k/1.5k, Gap Visa 10k, Best Buy 11.1k, Citi TY MC 10.8k, Citi AA Amex 6k, Nordstrom VS 10k, Costco Amex 12k, BofA CR VS 5k, Amex BCP 13.5k, Amex ED 5k, Sears MC 9k, HD 7k, Target 600, Amazon 7k, US Bank MC 15k, US Airways MC 8k, NFL Visa 4k, Patelco Visa 10k, Penfed PR VS 44.6k, Chase Hyatt VS 8k, Citi Simplicity 13.3k, PayPal MC 7.5k, BBVA Visa 4k, WF VS 14k, FNBO Amex 14.1k, OCCU VISA 15k, TR Visa Sg 16.3k, C1 QS Visa 11k, FRN MC 15k, HSN 4k, Saks WEMC 10k/4k, Chase Ink 18k, Arrival WEMC 10k, Ebates VS 8k, Orbitz VS 12k, NASA V 30k, USBk FP VS 21.5k, DC 30k, VirgAm 15k, Sams MC 15k, Amex Bz Gold, Amex SC 10k, BofW Bz MC 18k
Message 5 of 6
Valued Member

Re: What is the penalty if you get rejected for a credit card

I have almost identical reports for EQ and TU... Except that, in EQ I have an inquiry for my most recent credit card. This credit line already shows in both credit reports, so they are *practically* the same... There is a 15 points difference!!

 

Don't get too scared, though. The reason for this is that, my first credit line dates back  only 1.5 years. I guess the shorter your history, the bigger the hit you get from inquiries.



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Current Score: 724
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