Free Credit Report Agency Reviews
2010
I applied for my first credit card, but i was denied! Why is this?
I’m a twenty year-old college student who applied at Chase Bank for my first credit card, along with opening a free checking account, last week. My card was supposed to come in the mail, but instead I got a letter that said this:
“After reviewing the information provided in your application and your credit bureau report, we regret that we are unable to approve your request for a credit account at this time. The reason(s) for our decision are as follows:
Few revolving accounts opened long enough to establish credit history
Not enough accounts opened long enough to establish a credit history
Our credit decision was based in whole or in part on information obtained in a report from the consumer reporting agency listed below. The reporting agency did not make the credit decision and is unable to provide you with the specific reasons for our decision.”
What on earth did I do wrong?!
How can I have bad credit when I’ve never even applied for a credit card in my life?!
You don’t have bad credit it’s due to lack of credit. You didn’t do anything wrong. So no need to worry about that part. However you have to get started somewhere with credit. There’s a few different options that you can try it’s up to you as to which route you go. But go through investigate and choose the option that’s best for you. Don’t apply for a bunch of cards all at once because that will actually negatively impact you and make your situation worse. You have 3 options,
1) you can get a student credit card. They’re easier to obtain because it’s expected that a student just starting out will not only have no credit history but will also have lower income. so in their decision making they take both of those into account. Things you need to be careful of with this card is the APR (annual percentage rate) and annual fees. You can expect the interest rate to be higher because the bank sees you as a bigger risk because they have no clue as to how responsible you’ll be in making your payments. Annual fees are also typical on student cards although you can find places that offer student cards without annual fees.
2) you can choose to apply for a department store card. couple downfalls to this idea is a) you can only use the card in that particular department store which doesn’t work well for emergencies b) the APR is ridiculously high usually. If you do decide to go with a department store card make sure and ask them if they report to the credit bureaus, because that’s how you’re going to gain credit history. Most department stores do report but every great once in a while you’ll come across one who doesn’t.
3) you can apply for a secured credit card. these are actually pretty easy to obtain as long as you have a steady job. The biggest down falls of these cards are the security deposit, the APR and the annual fees. Basically with a secured credit card you have to make a security deposit for the amount that you want your credit limit to be. ie if you want a 100 dollar credit limit you have to give them 100 dollars. However if after 6months to a year (varies depending on the card) you’ve made all your payments on time for at least the minimum and you haven’t gone over your credit limit the company will change the card into a regular credit card and give you back your security deposit. Again with these you need to ask if the company reports to the credit bureaus. Most of them do..but some of the smaller lesser known banks won’t which again would defeat the purpose.
In your case given that you’re a student I would suggest a student card as your best option considering that they take into account your lower income. And with any of the choices I will always recommend to pay off your balance in full every month by the payment due date. If you can’t afford to pay for the item you put on a credit card outright then you just didn’t really need the item to start with.
Open for Questions: Credit Card Reform
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