We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What are Common Reasons for Credit Rejection?

Diane Goettel
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Two of the most common reasons for credit rejection are the fact that the person or organization applying for credit either has no credit history or has a bad credit history. Depending the selectivity of the institution extending the line of credit, a short credit history or even a slightly poor credit history can also lead to credit rejection. In the United States of America, people have a right to see their credit report within 30 days after receiving a credit rejection. Unlike in other cases when people may have to pay a fee to see their credit report, being rejected for a line of credit entitles the person or organization that applied for the credit to see this report at no charge.

People or organizations who have credit applications rejected should make use of two documents that are due to them: both the credit report, as mentioned above, and the letter that the receive denying them credit. According to the Equal Credit Opportunity Act (ECOA), people in the United States cannot be discriminated against based on age, sex, race, religion, marital status, or national origin when it comes to applying for credit. As such, companies that extend lines of credit must give a reason why they are rejecting an application. The information in this letter, as well as the information in the credit report, can be used to inform the applicant about how one can go about improving his credit.

If, for example, a man in his early 20s was denied credit because of a lack of a credit history or a limited credit history, he could decide to open a very small line of credit, perhaps just a few hundred dollars. Keeping this line of credit in good standing for a period of time might allow him to successfully apply for a larger line of credit later. For another example, if a company received a credit rejection because a few of its current lines of credit or financial accounts were in bad standing, then the company would do well to improve the standing of those accounts before applying again.

Another reason for credit rejection may be multiple credit inquiries within a short period of time. Also, opening a number of accounts in a short period of time is also a reason for credit rejection. This can be avoided by steadily making financial changes, inquiries, and updates instead of doing all of this work in a flurry of activity.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Diane Goettel
By Diane Goettel
"Diane Goettel has a BA from Sarah Lawrence College and an MA in English from Brooklyn College. Diane lives in Mount Vernon, New York with her husband, Noah. They are the proud parents of a Doberman Pinscher named Spoon. Specialties: book editing, book marketing, book publishing, freelance writing, magazine publishing, magazine writing, copywriting,"
Discussion Comments
Diane Goettel
Diane Goettel
"Diane Goettel has a BA from Sarah Lawrence College and an MA in English from Brooklyn College. Diane lives in Mount...
Learn more
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.