Okay, so you applied for a loan and have suffered loan denial. This can be a very unsettling and even scary experience. Sit down, take a deep breath and try to think why you were denied. You will eventually receive a letter from the lender explaining why you did not meet the criteria. You should also get instructions for ordering your credit report free from the credit bureau that the lender used when processing your application. The law entitles you to this free “adverse action” credit report.
The simplest answer as to why you didn’t get the loan is because you have a poor credit score. According to an article published on USNews.com, a low credit score is one of the reasons why you can be disapproved of a credit application. You can get your score free from any one of the three credit bureaus – Experian, TransUnion, and Equifax– or on a site such as CreditKarma. If you learn your score is below 580 this is probably why you were denied. But in addition to knowing the what, or what your score is, you need to know the “why” or why you have a low score.
Order your credit reports
If you haven’t yet received your “adverse action” credit report don’t wait. According to the data published by Experian.com, 6 out of 10 Millennials check their credit reports every three months or less. Federal law is that you can get your three credit reports free once a year. They are available on the site www.annualcreditreport.com or you can order each one from the three credit reporting bureaus. (Note: many people choose to get their reports one at a time every four months as this works as a free way to sort of monitor your credit year-round.)
Reviewing your credit report can be a very frustrating and time-consuming experience. You may even have a hard time understanding everything in your reports. The inherent problem is that they were not designed to be read by us. They were designed to be read by lenders. You may run into terms or information you simply don’t understand. When this is the case don’t be shy about going to your personal banker or to a consumer credit counseling agency for help.
Look for reasons why you experienced loan denial
When you review your credit reports if you find late payments, collection accounts or accounts that have gone into default these are the things that lowered your credit score and made you appear to be a less than stellar credit risk. Unfortunately, there’s not much you can do about negative items like these. You could catch up on any late payments. And if you have accounts that have gone into default you could pay them off. These items will stay in your credit reports for seven years but they will at least show a zero balance – meaning that you did pay them off The same is true of an account that went into collection. If you pay it off it will show a zero balance but the notation will stay on your credit report for those seven years.
It’s possible that are errors in your credit reports that are throttling your credit score. In fact, a report released in the year 2014 from the Federal Trade Commission revealed that nearly 20% of us have errors in our credit reports that could be dragging down our credit scores. So, again, when reviewing your reports look for errors and if you find any get them corrected.
When you get your “adverse action” letter
When that letter arrives, see if the lender’s reasons for denial match up to what you found in your credit reports. If the two don’t match you may need to do so more research. There are any number of reasons why the lender rejected you beyond just your credit history. It could have the do with the amount of time you’ve been at your current address, your income, lending restrictions in your state or because you made an error in your application. If you don’t understand exactly why you were turned down, be sure to call your lender’s customer service people for an explanation.
Get to work
Getting turned down for that loan should at least be a learning experience. You now know about the problems in your credit history that caused the denial so that you won’t make these mistakes in the future. As noted above, there may be some things that you can clean up to improve your record such as catching up on late payments.
Applying for another loan
Don’t apply for another loan until you’ve taken the steps outlined in this article. If you were to apply for several different loans at the same time this can ding your credit score. Every time you apply for credit this is called a “hard inquiry” and will ding your credit score anywhere from two to seven points. Apply for five or six different kinds of credit – including new loans – and you could damage your credit score considerably.
If you need money immediately
If you can’t get a personal loan but need money immediately try to find other ways to borrow it. You might be able to get an emergency loan or a new credit card with a high enough balance to carry you through until you can repair your credit. If you have savings, you could consider borrowing from them or from a family member or you could even ask your employer for an advance. Okay so you applied for a loan in your turndown that can be a very unsettling and even scary experience it down take a brief think why you were turned down you should have received how to use Apple photos okay so you apply for a loan and were turned down that can be a very unsettling and even scary experience it down take a deep breath and think why you were turned out you will receive a letter from the lender explaining why you did not meet the left is criteria you should also get instructions for ordering your credit card or credit card credit report why you didn’t get the loan is because you have a poor credit score have it yet received your adverse action credit report only you can get your Whatever you do don’t make the mistake of getting payday loans. If the road to hell is paved with good intentions the road to financial catastrophe is lined with payday loans. While these loans may look very attractive as a short-term solution they can turn into a slippery slope to bankruptcy.
Being turned down isn’t fun
Getting turned down for a loan is no fun at all. But it can be a great opportunity to take a hard look at your financial standing and your credit history. Try to think of it as a wake-up call and start taking control of your finances today.