(StatePoint) It’s no fun being denied anything, especially credit. Usually when someone is trying to get a line of credit, it’s for a big reason or major life milestone and having a credit application denied can feel like a real setback. But this rejection isn’t something to take personally. It’s more common than people realize and doesn’t spell doom for your financial future. In fact, credit denials can be a good opportunity to take proactive steps to improve your credit health long-term.

How will I know I’ve been denied credit? If a lender denies your credit application, they will send you a letter called an “adverse action notice.” Don’t worry — it sounds more menacing than it really is. This letter will explain why the lender denied your application and give you information about the credit reporting agency where they got your information. With the notice, you are entitled to get a free credit report from that agency within 60 days.

Why was I denied credit? There are many reasons a credit application could be denied and the reasons vary by lender, the types of credit requested and your personal credit history. The adverse action letter will list the reason or reasons why you were denied. Common causes include having a limited credit history, too many recent inquiries and a high balance on current credit accounts.

What should I do if I am denied credit? If you are denied credit, you don’t technically have to do anything. But that’s probably not your best option. Your credit report acts like your financial resume, showing your history of what you’ve done with credit. Read it carefully to see if there are any areas where you could do better. Are your balances too high? Did you miss a payment recently? Set up automatic payment options on your monthly bills so you’re always on top of it.

If you’ve been denied credit, learn more and take that first, important step by getting your TransUnion credit report at transunion.com/deniedcredit.

No financial plan is completed without setbacks, but don’t allow those setbacks to keep you from taking action. Whatever the cause of a credit application denial, there’s a solution. With perseverance and patience, you can achieve your financial goals.

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