Applying repeatedly for credit after being turned down makes it worse


Credit Wise
Credit Wise columnist Kevin Weeks
With more than 20 years experience in the nonprofit credit counseling industry, Kevin Weeks joined the Financial Counseling Association of America (, @TrustFCAA) as its president Dec. 1, 2014. Weeks has extensive knowledge of both the credit counseling industry and the FCAA organization, having served in leadership positions for three of its member agencies and on the FCAA board of directors. In addition, Weeks is working with FCAA members to help develop a long-term solution to the student loan crisis through the website Weeks holds a bachelor of science degree in business administration, management information systems from Salem State University.

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Dear Credit Wise,
I have bad credit, keep on getting turned down. What should I do? -- Amparo


Dear Amparo,
I know it can be really frustrating when you are trying to overcome a bad credit score. However, continuing to apply for credit is only making a bad situation worse. Here are some steps you can take that should help, not hurt.

First of all, you need to request a copy of your credit report. You can do this for free at Check the report carefully to be sure that all of the information is accurate. If there are mistakes, you can request that those be removed. Note that this only applies to incorrect information on your report. There is no way to remove negative information that is correct.

Several factors come into play in the calculation of your actual credit score; one of those factors is credit inquiries. Each time you apply for credit and are turned down, it is noted in your credit report. However, among the five factors determining your credit score, No. 1 is making on-time payments. So the first thing you need to do -- aside from not applying for more credit -- is figure out a system for paying your monthly bills on-time, every time. This means all of your bills, including your rent or mortgage and utility bills, not just credit card or similar kinds of bills.

Coming up with a system that works for you is the key here.  It is totally up to you to choose whether to use an online type of budgeting program or a simple pencil and paper system where you write down your income and expenses.  Just be sure that whatever method you choose, you include everything. You will have some fixed expenses and some expenses that vary month to month.  Keeping track of what you spend is a great way to understand not only where your money is going, but how to account for that in a monthly spending plan.

Just like your budget, there are many options for tracking expenses. These run the gamut from a low-tech pencil and pad of paper that you keep with you at all times to an app for your smartphone.  Here again it’s up to you, but you need to take into account every penny you spend.  At the end of a month, you should be able to construct a meaningful budget, which will in turn allow you to pay your bills on time.

For someone in your position, a secured card is a great option to start building positive credit. These cards are backed by your own money so there is no risk to an outside creditor but they are reported to the credit bureaus just like a traditional credit card.  Use this card monthly and make your payments on time each month and your credit will slowly improve. Pay the balance in full each month and learn to manage your money one small step at a time. It is an unfortunate fact of life that while you can quickly bring your credit score down, building it up takes more time and patience. 

Be wise with your credit!

See related: Applying for a credit card? Here are your odds for approval, 9 low-tech ways to manage money, credit

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Published: March 14, 2015

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