You’re Denied a Credit Card Due to Too Many Hard Inquiries. Now What?

If you’ve been chasing credit card rewards for a few years now and feel like all the best credit card rewards opportunities are drying up, you’re not alone — and you’re definitely not crazy. Whether we like it or not, credit card issuers have been tightening up criteria for new card approvals over the last few years.

Many limit how often you can get a signup bonus on a particular card or family of cards. Others won’t approve you for a new card even if you’ve never held one of their cards but feel you have too many new credit cards from other issuers.

The reason: Issuers don’t make money off of people who quickly “churn” credit cards. Churners used to sign up for a card, meet the minimum spend requirement for a signup bonus, then close the card and reapply in order to get another signup bonus. Policies instituted in the last few years have all but shut down that practice. Issuers want to see that you might actually spend money on their cards after you get the signup bonus.

But even people who don’t apply for multitudes of credit cards and have good credit scores can find themselves mysteriously denied approval for cards. Seemingly random denials for reasons that include “too many hard inquiries” or “too much open credit” have prompted consumer complaints lately on message boards and in Facebook groups.

A friend recently told me that he was denied for a travel credit card even though he had never had a card through that particular issuer before. In the letter they sent him, they stated that he had too many new credit cards within a short amount of time. But, he says he’d only had four hard inquiries within the last two years.

How to cope if you have too many hard inquiries

A denial is a denial, and there’s not much you can do if a card issuer doesn’t want to give you one of their credit cards. You can pick up the phone and call their customer service or a reconsideration line to ask if they’ll change their mind, but you can’t force their hand.

If you do call, one possibility to consider is that a card issuer may let you move some of your lines of credit around to make room for a new card. I’ve had this happen when I’ve been denied and called in to inquire. By lowering the line of credit on one of my rewards cards with that bank, I was able to “free up” open credit for a new one.

In the event this doesn’t work and you can’t get approved for a card (or cards) you want, here are some of the best steps to consider:

Take a short break

It’s easy to get a case of FOMO (Fear Of Missing Out) when you’re not applying for new rewards credit cards. After all, most cards advertise their limited time offers as if they’re the best you’ll ever see.

But when it comes to rewards cards, what goes around comes around. If you see a card that’s offering 50,000 points or 70,000 miles for a limited time, a quick internet search will likely show you that the offer is far from new. In fact, it was probably offered last year and the year before.

As a consumer, you have to remember that deals come and go, but they often come back. If you’ve signed up for a ton of credit cards for the signup bonuses over the last few years, you may need to wait a while before reapplying. Hard inquiries stay on your credit report for about two years, (though they stop impacting your credit score after one year).

A cooling off period of six to 12 months may be enough to improve your chances of getting approved for new cards in the future. But worst case scenario, in 24 months hard inquiries won’t stand in your way of qualifying for a new credit card. Also remember that there are new cards hitting the market every year, so it’s not like you’re tapped out forever.

Focus on maximizing the cards you have

If you’re taking a break anyway, you may as well spend some time figuring out how to make the most of the rewards credit cards you already have. Start by making a list of each card you carry, along with its respective bonus categories. From there, you can mark each card with a marker or sticker to notate its earning potential.

If you have a travel rewards card that offers three points per dollar spent on dining and travel, for example, you’ll want to ensure you use that card for every dining and travel purchase. If you have a cash-back card that offers 5x points in categories that rotate each quarter, take stock of those categories so you can max them out.

Also make sure you’re taking advantage of other opportunities to earn more points such as shopping portals and dining programs. Even small sums of extra points can put you over the top of a rewards earning threshold.

Get your spouse in the game

If you have a partner or spouse who has shied away from rewards cards in the past, now may be the ideal time to get them on board. Even if you’re married and your spouse is an authorized user on your credit cards, they can still apply for all of their own rewards cards and earn the same signup bonuses you’ve earned already. (See also: Best Credit Card Rewards Strategies for Couples)

In a lot of ways, this can be just as good as earning the points yourself. Many travel programs, like Hilton Honors, let you pool points with anyone. And some credit card rewards programs let you pool points with a spouse or another member of your household. (See also: Best Travel Rewards Credit Cards)

Your spouse can earn the signup bonuses, but you’ll still get to spend them provided they are on board with your plan.

Consider cards you’ve never looked at before

Finally, don’t forget that there are plenty of rewards cards to consider other than the handful you’ve had your eye on lately. After doing some research, you may even learn about card issuers and programs you’ve never heard of before.

If you’re into cash-back credit cards, research all the cash-back credit cards on the market to look for new cards and bonuses you’ve never had in the past. If you’ve tended toward travel cards that are co-branded with an airline or hotel, look for flexible travel credit rewards cards that give you statement credits for travel or cards that let you transfer points to airlines (or vice-versa).

By branching out, you could earn more rewards over time. And that’s the whole goal of pursuing credit card rewards anyway, isn’t it?