People Often Get Rejected Instead of Having Good Credit Score
One of the biggest perks of having a strong credit score is that it often makes other financial milestones easier to obtain. People having excellent credit score usually gets eligible for better rates on loans. This is not yet they even have better chances of getting approved for significant loans like a mortgage.
Although, people with good credit score gets approved for loans but it is not the magic key. It is evident that a person with a satisfactory level of credit score has been turned down for a loan. Below you will get to see a detailed explanation of how a person with good credit score gets rejected.
People Rejected Even having Good Credit Score
When someone applies for a mortgage or a bank loan in order to set up a small business enterprise, he/she is asking for more access to the money so that when needed the money it can be spent without any hesitation.
Though a good credit score is indeed one of the most factors but it is not the only one. Below mentioned are some of the factors based on which the application of a person can be canceled in case the application has any of the warning flags.
- Brief history of credit
The overall length of the credit history is very important for getting a loan and one need to have a settled history with credit products.
- High debt-to-income ratio
It is the percentage share of the income spent by the person on required debt payments and having high DTI is one of the major red flags for lenders. This is mostly seen in case of cheap auto insurance.
- Change in the income or low bank account
In case the change in the income is too low and if the bank balance does not support the level of assets required by the lender, then there is a possibility that the application could get rejected.
- Collections amount or late payments in recent times
In case you miss out to make payments for your credit card bills then it might hurt you more while getting the approval for the loan. It might happen with cheap auto insurance in Fresno CA.
- Steps to be taken when the Application is rejected
It remains no doubt that denied for a credit card, mortgage or even for any other loan is highly frustrating and disappointing as well. Check out certain steps that one should do in case the application gets rejected.
- Identify the main reason for the rejection
Of course, the applicant has got the right to learn the reasons for what happened with the application and why it was rejected.
- Check if there is any mistake or error in the application
Having a review of credit history is considered as a soft inquiry and it will never hurt the credit score.