Coping With Loan Denial

LOAN DENIAL
Have you just been turned down for a loan? Are you wondering what you should do now? Below is information that will help advise you what the proper procedure is for someone in your situation.

When denied for a loan, the best thing you can do is find out why you were turned down. By law, credit issuers must inform you their reason for denying you credit. They will provide you with a letter, with explanations as to what factors were used in determining your non-approval. You will also receive information on how to receive a free credit report copy from the reporting bureau the creditor used to obtain your information and process your request.

Once you receive your credit report, go over it very carefully. Look for all red flags and negative marks. This can include late accounts, collections, judgments, liens, bankruptcy filings, or anything else that may allow lenders to label you as high risk. Learn more about interpreting your credit report.

Any type of negative mark will be present on your credit file for seven to ten years. If you identify any information that is inaccurate or out-of-date, you must take steps to remove this data by filing a dispute with reporting bureau. Check out a sample dispute letter.

In addition to looking for errors, you should examine your credit score. Your credit score is a major factor used by lenders in their decision making processes. Your credit report will have a breakdown of your credit score and what factors are impacting your score and credit. Some reports even have calculators that allow you to hypothetically determine what your score can be as a result of different scenarios. For example, you can get an idea as to how your credit score will improve as a result of paying off credit card debt.

When going over your credit report, it is possible that you may discover that you have become a victim of identity theft. If this is the case, you must take action immediately. You will need to report your identity theft to all three credit reporting agencies as well as law enforcement. This will make it easier for you to remove negative info from your credit report.

Once you have thorough gone over your credit report, compare your denial letter with your findings. Does the information match? If the answer is yes, you have a head start at fixing your problems that are making it difficult for you to obtain credit. If the information does not match, there are likely other reasons as to why you have been denied. Possible reasons for rejection can be too little income, length of time at your current residency, errors in your application, etc.. You can find out the exact reason why you were denied by calling the lender's customer service line.

Wait at least a few months before you decide to apply for any other type of loan or credit. It can take 6-12 months before you see any sort of results of improved credit and score. A good idea would to be enroll in a credit monitoring program. This will allow you to check your credit profile as frequently as you want. Learn more about the benefits of enrolling in a credit monitoring program.

Once you have determined that you credit it as at a point where approval for a loan or credit card is likely, go ahead and try applying again. Keep in mind, that every time you apply for any type of loan, your credit is adversely affected as a result of the inquiry. There is no point in applying for loans at multiple sources. If you are denied by one provider, it is likely that you will be denied by all other financial institutions.

If you need money now and can not wait to improve your credit, consider asking a family member to lend you some cash. Or, you can apply for a no credit check loan for up to $1,500.

Take being denied credit as a learning experience. As a result, you'll learn how to improve your credit and make better decisions financially in the future.

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