How Do I Cancel a Credit Card Application?

Managing your credit is important for qualifying for essential loans, including auto, personal and home loans. When it comes to credit cards, you want to look for cards with low APRs so you aren't charged an exuberant amount of interest so you can easily make your payments each month. If you have started the process of applying for a credit card, but found a better offer elsewhere, you may cancel the application or a new account by calling the credit card company to make the changes.

How Do I Cancel a Credit Card Application?
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Applied But Not Yet Approved

Contact the credit card company immediately and ask them to cancel the application. When you make the call, a customer service representative may try to persuade you to continue with the application, but be persistent.

Approved But Haven't Received the Card

Once your application is processed, a "hard inquiry" on your credit report has already taken place, which means a potential lender is actively reviewing your credit. However, you can still cancel the account to avoid any further effect on your credit report. Contact the customer service department and request to close the account. Record any information, such as your confirmation number. You should also receive a letter from the company stating that the account has been closed. Hold onto this letter and any other documentation in case a problem should arise.

If You Have the Card

If the card has already arrived in the mail, you now have an open line of credit even if you haven't activated the card. Contact customer service as soon as possible to cancel the card. You should always follow up the phone call with a written request, and to send it certified mail. You may be responsible for applicable charges – like an annual fee – but you can ask for those to be waived. Keep any documentation and paperwork, then shred the card.

Card Applications and Your Credit History

An application that has not been processed should have no impact on your credit score. However, an inquiry on your account -- whether or not you are approved for the card — could lower your credit score by about five points. Although the inquiry remains on your credit history for two years, the impact on your credit score only lasts for about a year.

If you close the account, wait awhile before applying for another credit card. Consumers should hold off on applying for new cards until the original account is marked as "closed" on your credit report. This way, it won't look like you're opening a lot of credit accounts at the same time.

Unused Credit Cards

If the card sits unused with no purchases, no annual fees, and a zero balance, the card issuer may close the account after a period of time. The issuer incurs fees to maintain the account, so it's better for the company to close one that is inactive.

Closing an account could affect your credit score and your credit utilization ratio. This ratio compares the amount you owe to the amount of available credit you have. A higher ratio of debt to credit could hurt your FICO score. If you close an unused account, you are also doing away with some of your available credit, which raises your credit utilization ratio.

You may continue to receive statements for the closed card account for a couple months after canceling the application. It is important to always open those statements to ensure that a zero-dollar balance is there and that the account has been properly closed out.