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If you're applying for credit right now, you may be more likely to be rejected—but there are steps you can take to improve your odds.

Loan officers have reported toughening their lending standards for more than a year. Amid high prices and high interest rates designed to fight inflation, lenders have been skeptical borrowers won't be able to pay loans back. Consequently, they've made it harder for individuals and businesses to borrow money by requiring better credit or offering more unfavorable terms.

While fewer people are applying for credit for the same reasons, a recent survey from the New York Federal Reserve Bank found lenders rejected applications across all types of credit at a rate of 21.4% in June, compared to 18.7% in February.

Even though lenders have become more picky about which borrowers they extend credit to, there may be ways to get the credit you need. And if you do get rejected, you can still find out the reason and work toward fixing the issue.

A good credit score can go a long way in improving your odds of getting credit.

The latest data from FICO shows the average credit score declined one point, from 718 in July 2023 to 717 in October 2023, which is likely due to missed payments as a consequence of higher prices and inflation weighing on consumers.

According to the New York Fed survey, those with subprime credit scores, or scores below 680, were more likely to be rejected when applying for credit, with a rejection rate of nearly 52%. Applicants with a credit score between 681 and 759 had a significantly lower rejection rate of 11.5% while those with a score above 760 only had a rejection rate of 3.7%. 

Just by knowing your credit score, you can get a better idea of which types of credit or credit cards you'd be eligible for, experts said. For example, those with subprime credit scores are more likely to be approved for a secured credit card than a rewards credit card.

Applying for the right loans for your credit can help you avoid filling out too many credit applications that result in a credit check. Remember, when you apply for multiple lines of credit in a short period, those credit inquiries can pull down your score. It can also negatively impact your credit if you receive multiple new loans at the same time since the average age of loans is also an important factor when calculating your score.

If you don't have a great credit score, there's still hope. You can start by making sure your credit report is error-free and does not contain any incorrect late payments or information about your identity.

If you want to improve your credit score, your primary focus should be on making payments on time and in full, said Barbara Ginty, host of the Future Rich podcast and CFP.

Another factor that affects your credit score is your credit utilization ratio or the portion of the available credit you use. You may see some improvement in your credit score by bringing down your balances.

Avoid closing credit cards or lines of credit frequently, as keeping them open can also help boost your credit score.

However, if you do apply for a line of credit and get rejected, it may be a learning opportunity.

Because of a federal law, known as the Equal Credit Opportunity Act, lenders are required to inform consumers of the reason why they were rejected for a loan or line of credit, said credit expert John Ulzheimer. If they don't inform you of why you were rejected, you have the right to ask.

A lender may reject you for a variety of reasons such as your debt-to-income ratio being too high or your credit history being too short.

If you're unable to improve your credit score or qualify for a new line, you can try asking for a credit limit increase—however, according to the Fed survey, 37% of those who applied for more credit on existing accounts were rejected.

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Refinancing surged last week as many homeowners took advantage of a drop in mortgage rates to pay less interest on their existing home loans.

The average 30-year, fixed-rate mortgage dropped to 6.87% last week, its lowest rate since March, according to the Mortgage Bankers Association (MBA). That drove refinancing to its highest level since August 2022, according to the MBA's weekly mortgage application index.

High interest rates have stymmied the housing market over the past two years. Potential buyers have been pushed to the sidelines by high monthly payments. Sellers have hesitated to list their homes for sale and trade in the ultra-low mortgage rates of years past.

However, mortgage rates could be on the downtrend as a Federal Reserve rate cut is in sight.

There are two major influencing factors on mortgage rates—10-year Treasury bond yields and the fed funds rate. As the Federal Reserve moves closer to cutting its fed funds rate, traders are more attracted to longer-term bonds, pushing up prices on the 10-year bond and pushing down mortgage rates. (Bond prices and yields move in opposite directions.)

When the Federal Reserve cuts its influential rate, mortgage interest could fall even further. Market participants are convinced that the Fed will start cutting rates by September.

Much of the increased refinancing activity last week came from government-sponsored loans such as Federal Housing Administration (FHA) and Veterans Administration (VA) loans, which typically have lower-than-average rates.

“While FHA and VA refinance applications accounted for a significant share of the increase, these are likely recently originated loans with even higher than current offered rates,” said Joel Kan, MBA vice president and deputy chief economist.

While refinancing surged, home purchase applications continued to lag, down 3% compared with the prior week, and lower by 14% from the same week last year.

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Intel (INTC) and GlobalFoundries (GFS) shares rose Wednesday, while Nvidia (NVDA) and other chip stocks tumbled, amid concerns about tightening trade restrictions and rising geopolitical tensions affecting the chip industry.

GlobalFoundries led gains on the Nasdaq with shares up more than 6% around 2 p.m. ET Wednesday. Intel climbed close to 2%. Meanwhile, chip manufacturing equipment maker ASML (ASML) led losses on the Nasdaq, falling nearly 12%. Shares of Advanced Micro Devices (AMD), Qualcomm (QCOM), and others were also lower, with the VanEck Semiconductor ETF (SMH) down 6%.

Taiwan-based chip manufacturing giant Taiwan Semiconductor Manufacturing Company (TSM) is a key player in the space, supplying fabless companies like Nvidia, Qualcomm, AMD, and others with the hardware necessary to make their products. American depositary receipts (ADRs) of TSMC also dropped Wednesday.

Intel and GlobalFoundries have manufacturing capabilities in the U.S., and could stand to benefit from support for domestic chip manufacturing as geopolitical tensions rise.

The Biden administration is reportedly considering implementing stricter trade restrictions on exports to China, which could hurt sales for ASML and many other chip-related companies, according to .

Imposing the foreign direct product rule (FDPR) would allow the U.S. to curb exports of goods made in other countries that use American tech. That could for example hold back revenue for the Netherlands’ ASML, which makes lithography technology essential in mass-producing semiconductors, since China represents the company's largest market.

Separately, former President Donald Trump said in an interview with that Taiwan, where chips for many of the biggest tech giants in the U.S. are manufactured, should pay the U.S. for defense, adding to geopolitical worries.

The Biden administration's CHIPS and Science Act has invested billions of dollars to support chip manufacturing in the U.S. and reduce reliance on other countries.

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A coalition of Concerned Northern Youths and Students in 19 Northern states have on Wednesday announced their resolve to withdraw from the planned nationwide protest over economic hardship in the country.

The Coalition’s National Coordinator, Jibril Sani Bello, who kicked against the protest while addressing newsmen in Kano, however, called on students in the country to desist from participating in the protest.

Bello, who doubles as the National Senate President, National Association of Kano State Students, NAKSS, said plans to join the protest have already reached an advanced stage but it resolved to withdraw from the protest because organizers and the aim of the protest were unknown. He said, that although they understand the economic hardship faced by Nigerians in recent times protests in the past had caused setbacks to their academic pursuit.

According to him, “We understand the economic hardship in Nigeria but as students, your future is paramount. Already, plans to join the protest have reached an advance stage but we resolved to withdraw from the protest due to the fact that organizers and aim of the protest were unknown, especially with the sponsorship for us to fight for our right and so, we are uncertain whether their intentions are peaceful or v+olent

Students of Kano State University of Science and Technology, KUST, Wudil and Uthman Danfodio University in Sokoto state could bear witness that protest has, in most case, it has been a setback to our academic journey. Those in KUST, Wudil, in the 2017/2018 session have to witness an elongation of 4 to 5 months just because of a day protest. Similarly, students of Uthman Danfodio University, in 2012/2013, there was a protest which led 3 to 4 months elongation of the academic journey.

I strongly urge you to refrain from participating in the upcoming nationwide planned protest. The organizers of this protest are unknown, and we are uncertain whether their intentions are peaceful or v+olent. Your safety and well-being are our top priority.

Besides, this administration has shown consideration for students by making educational loans available without interest, ensuring that you can focus on your studies now and secure jobs in the future to repay these loans. Let’s prioritize our education and future success. While we appreciate the efforts of the government, we are also appealing to them to see the possibility of expanding the scholarship exercise like the foreign one to make it mandatory for every student to be a beneficiary of the scholarship and it will make an academic journey hitch free for students” the National Coordinator, Bello however stated.

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Shares of First Horizon Corp. (FHN) slipped in intraday trading Wednesday after the regional bank reported second-quarter results lower than analysts expected as lower net interest income (NII) hit its profits.

The parent of First Horizon Bank reported NII of $629 million, down slightly from the $631 million it reported last year and below the $636 million analysts had projected, according to estimates compiled by Visible Alpha. That helped lead to revenue coming in below estimates at $815 million, down from last year's $1.03 billion.

Net income fell to $204 million from last year's $329 million, below the $212 million analysts had expected. On a per-share basis, First Horizon reported profit of $0.34, narrowly missing estimates of $0.36.

First Horizon shares were nearly 6% lower at $16.44 as of 2:15 p.m. ET Wednesday. The KBW Nasdaq Regional Banking Index (KRX) moved higher.

Banks at the national and regional level have in recent earnings reports largely reported lower NII as deposit costs have risen to offset the benefit of higher interest rates on loan payments. Analysts have projected that interest rate cuts that markets predict will happen this year will negatively impact banks' NII in the coming years.

First Horizon also lowered its full-year NII outlook, projecting it to be down 2% to flat compared with the fiscal 2023 mark of $2.56 billion, down from previous estimates of a 1% to 4% increase. Analysts project NII to be roughly unchanged from last year.

Citizens Financial Group (CFG), which also reported earnings Wednesday, similarly posted lower NII than the same time last year, falling to $1.41 billion from $1.59 billion. Other regional banks reporting earnings this week include M&T Bank (MTB) and Fifth Third Bancorp (FITB).

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U.S. Bancorp (USB) shares surged in intraday trading Wednesday after the bank holding company’s second-quarter results beat analysts' expectations on the top and bottom lines.

The company reported earnings per share (EPS) of $0.97 on revenue of $6.87 billion, above Visible Alpha consensus estimates of $0.94 per share in profit on revenue of $6.79 billion. Net interest income (NII) was $4.02 billion, topping estimates of $3.96 billion. 

“This quarter we generated $6.9 billion in net revenue driven by improved linked quarter net interest income, supported by healthy deposit growth, and continued momentum in leveraging our diversified fee income platform to deepen relationships,” Chief Executive Officer (CEO) Andy Cecere said.

U.S. Bancorp shares, which had been essentially flat for the year through Tuesday's close, traded nearly 5% higher at $45.30 as of 1:40 p.m. ET Wednesday.

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