Q: I applied for a credit card online a few days ago and was told the company needed some time to review my application, but I still haven’t heard back. Are companies supposed to tell you whether you are approved within a certain time frame?
A: The Equal Credit Opportunity Act requires a credit card issuer to respond within 30 days of receiving the application, says John Ulzheimer, CEO of SmartCredit.com, but most issuers will tell you much sooner than that.
“They’re incentivized to get you through the process,” says Kenneth Lin, CEO of CreditKarma, since they want you to start using the card. He explains that most major lenders that rely on an automated approval process will tell you right away whether you’ve been approved or denied. If a lag time occurs with an issuer using this type of service, it’s usually either because a technical error occurred or the automated software picked up on something that threw it for a loop.
In both these instances and instances in which automated software is not being used, “the average application will be approved or denied in 14 days,” Lin says.
Remember, existing laws also require issuers to do more than just tell you you’ve been denied a line of credit. They are required to send a written notice of adverse action that outlines, among other things, which consumer agency provided the score that led to the denial.
Additionally, “thanks to Dodd-Frank, that adverse action letter must also contain the actual credit score they pulled from the credit bureaus that was used to assess your risk,” Ulzheimer says.
This letter, plus your score, is typically how most people who have to wait will ultimately learn that they didn’t get the card. Those who were ultimately approved may find out simply by receiving the card in their mailbox.