You are not alone who has faced denial for loan, credit card, mortgage, or even a rental application. No doubt this is frustrating. But this is not the end of your career. You can easily turn the rejection into approval by following some legal and proper steps of credit rebuilding.
So, don’t be upset. Take your time and start rebuilding your credit smartly from today.
The Reasons of Rejection
Millions of residents are facing rejection but they don’t know why this is happening with them. Sometimes despite having a handsome salary or good source of earning, people get rejected for loan approval. Let’s know why-
- Most credit rejections happen for poor credit scores.
- Missed payment or late payment issues in credit history. Many people think that they will pay two months’ monthly installment together next month. But unfortunately, due to this attitude your credit score has decreased and negative remarks stay on your credit history for 7 years. Also, the lenders determine you as an irregular and irresponsible borrower.
- Many people spend their credit without considering their available credit limits. They even don’t pay down to balance it later. As a result, the interest rates gradually increase and at the end lenders stop approving the loan application. So, try to keep your credit utilizing percentage below 30%. It’s better if you can do it in 10%.
- Multiple applications within a short period of time impacts negatively on credit score. Stop doing this while rebuilding your credit.
- Often review your credit report to find out if there are any inaccuracies or errors. Dispute them as soon as possible. Otherwise lenders may label you as a high-risk borrower.
What Should be My Steps toward Approval?
You already know that your credit is solely responsible for the rejection of the loan application. So, steps should be based on fixing your credit. Let’s explore what you should do.
- Check your credit to identify if there are any inaccuracies or errors in your credit report that are hurting your credit. Download your credit report from three major credit bureaus; Experian, Equifax, and TransUnion at AnnualCreditReport.com.
- Dispute the errors with credit bureaus if you find any errors.
- Try to pay down fast if you have any missed payment issues.
- Set a reminder on your phone or start an autopayment option to avoid late or missed payment. Because it stays on report for 7 years as a negative mark.
- Lower your credit utilization percentage. Keep it below 30% than your available credit limit.
- Don’t close your old account. The long length represents you as a responsible and consistent credit holder.
Reapply Just after Rebuilding
Just after rebuilding your credit, you will understand that if you apply now, there is a chance to be approved. Rebuilding credit increases the credit score. Keep your credit report clean to show you as a responsible and trustworthy borrower.
Avoid reapplying too quickly. Repeated applications within a short period of time require hard inquiry which is not good. It can hurt your credit score. Apply only when your credit is improved and you have a good credit score.
Hire Experts If Necessary
Rebuilding or boosting your score can feel like a hassle if you do it by yourself. Or you might be lost in the middle of the credit rebuilding process. In this situation, feel free to hire an expert who can boost your credit score by following all the processes with laws and regulations.Whether you live in Florida, New Jersey, California, Pennsylvania, or Virginia, an experienced team of the Great American Credit Repair will guide you in completing the credit rebuilding process with legal activities. Great American Credit Repair has been helping people in fixing their credit since 2008.