Does Credit Card Declined Affect Credit Score?

By Bruce Boswell •  Updated: 12/14/21 •  6 min read
Filed under: Credit Cards

We’ve all had that moment where we’ve gone to pay using our card and it has declined. It’s an embarrassing moment, particularly in a busy grocery store. 

Fortunately for most of us, this is simply an oversight or a problem with the machine. However, for some of us it is due to a lack of funds on the card or the card has been cancelled by the credit card company! 

Does Credit Card Declined Affect Credit Score

Either way, you might be worried that the card being declined is going to affect your credit score. But is there any truth to that?

Today, we’re going to answer that for you. Does your credit card being declined affect your credit score?

Reasons For A Credit Card Decline 

There can be a number of reasons for a credit card being declined. Let’s take a look at some of the most common. 

Giving The Wrong Card Information 

It probably comes as no surprise that if you give the wrong card information, no charge will be made and therefore the payment will be declined. You may have given the wrong digits on the back of the card, the wrong expiry, misspelled your name or provided the wrong billing address.

Whatever has been incorrectly entered though, it will refuse the payment. The same principle applies if you’ve punched in the wrong PIN.

Failed Additional Security Checks 

Some credit card companies now ask for additional security checks to be passed before allowing a payment. This could be in the form of an email, call or message sent to your cell phone.

It could even be security questions like “mother’s maiden name” on the web page or a call where you’re trying to make a payment.

Failing the additional checks will inevitably end in your card being declined, simply to prevent fraudulent transactions. After failing, you may receive further calls or messages to inform you somebody has failed security and asks if it was you that tried. 

Expired Card

If your credit card has expired, it will decline. Your credit card provider should have been in contact with you for a replacement – however they may have their reasons not to. It’s best to check with the lender to see what’s going on. 

The Merchant Does Not Take This Card 

Some merchants do not accept certain cards and some don’t accept credit cards at all. Before making a purchase, try and check what payment methods the merchant will accept. 

Unusual Activity On The Card 

If you’ve changed the way you normally spend money on your credit card, the lender might decide to freeze the account until they’re in contact with you to confirm the legitimacy of the transactions. This is another way to prevent fraud. After confirming some details, you should be good to go again. 

You’re On Vacation 

If you’ve gone on vacation, particularly outside the United States, you should have informed your credit card provider. If you didn’t, they may not allow a transaction to be made, as it will flag up as unusual and they will suspect fraud. 

You’re An Additional Holder 

As an additional holder to a credit card, the primary user might not have informed you that they have either cancelled the card, frozen the card or maxed out the card. It’s always important to be transparent as additional card holders when it comes to things like this. 

The Card Has Been Cancelled/Frozen 

If you haven’t (or additional card holder hasn’t) authorized this, the only other entity to cancel the card will be the credit card company.

This could be due to a number of reasons such as missed payments, suspected fraudulent activity or change in your circumstances that the lender must assess before more payments are authorized. 

You’ve Maxed Out The Card

The lender provided you with a credit limit and you’ve reached the maximum of this and haven’t paid a sufficient amount back to cover it. In these circumstances, it might be wise to consider credit card refinancing (balance transfer) or a debt consolidation loan. Unfortunately, it is impossible to cancel a maxed out credit card by you.

It will remain active and the lender will require you to contact them with a repayment plan going forward. Until then, this will leave a mark on your credit score.

Does A Decline Of My Credit Card Affect My Credit Score?

Not directly, however in some countries – this might be different. The reasons behind the decline however could affect your credit score. If your credit limit has been reached, this will mean that your credit utilization is very high.

This is always a bad thing when it comes to your credit score. 

If a decline has occurred due to missed payments, this will also have a major negative impact on your credit score. A black mark will appear for years on your credit score that indicates to potential lenders that you can not manage credit responsibly and it is unlikely that you would get another line of credit – but not impossible. 

If your credit reference agency has listed missed payments on your credit card onto their credit report, you should check these details. If you haven’t missed a payment – you need to raise a dispute with the credit reference agency and contact whatever lender has claimed you have.

You do not want these black marks on your score, especially when they are false.

Why Is My Credit Score Important?

Credit scores indicate to potential lenders of your responsibility and stability to manage a line of credit and pay it off regularly or timely. If you do, the lender might increase your credit limit allowing you to utilize more money.

This is good for some people, assuming their spending patterns do not change, as their credit utilization will still be low but they’ve been issued a larger limit. This indicates to other lenders that the person can be trusted and manages large lines of credit responsibly. 

This affects the likelihood of getting a mortgage, credit card, car hire, store card or any other form of credit you can think of. Needless to say, your credit score is crucial in your life. 

Sum Up 

Your credit card being declined will not directly affect your credit score, but some of the reasons behind the decline might. It’s best to check before you continue using your card and always remain vigilant of your credit score and general finances.

Bruce BoswellBruce Boswell

Bruce Boswell

Bruce Boswell enjoys researching and writing about all things related to investing and saving money. Whenever he has a chance, Bruce loves travelling all around the world with his wife and trying new foods.