How to Avoid the Most Common Reasons for Credit Denial
Avoid delinquent credit obligations., Double check your credit application., Know if you have too many inquiries., See if there are errors in your credit file., Consider that you don't have enough credit.
Step-by-Step Guide
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Step 1: Avoid delinquent credit obligations.
Late payments, bad debts, or legal judgments against you make you look like a risky customer.
Get A copy of your credit report and remove any errors. -
Step 2: Double check your credit application.
Credit application is incomplete.
Perhaps you left out some important information or made an error on the application.
Any large discrepancy between your application and your credit file can count against you.
The lender will wonder if you are hiding something.
Always double check your application. , Inquiries are made whenever you apply for credit.
Requesting your own report also counts as an inquiry, but is usually not held against you.
At the creditor’s discretion, as few as four inquiries within six months’ time may be considered a sign of excessive credit activity.
The creditor may then presume that you are trying desperately to get credit and are being rejected elsewhere.
NOTE* Generally, several inquiries for a "major" purchase, like a home or auto loan are counted as "one" inquiry. , These may arise simply from typing mistakes, or from confusing your name with someone else’s similar name.
Since the credit bureaus handle millions of files, the possibility for error is substantial.
Errors can be found and corrected only by carefully reviewing your file for accuracy at least once a year and then taking the necessary steps to correct any errors that you do find. , Insufficient credit file.
Your credit history is too scanty for the type or amount of credit you requested.
You need to develop your credit history more fully before qualifying for the level of credit you are now requesting. -
Step 3: Know if you have too many inquiries.
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Step 4: See if there are errors in your credit file.
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Step 5: Consider that you don't have enough credit.
Detailed Guide
Late payments, bad debts, or legal judgments against you make you look like a risky customer.
Get A copy of your credit report and remove any errors.
Credit application is incomplete.
Perhaps you left out some important information or made an error on the application.
Any large discrepancy between your application and your credit file can count against you.
The lender will wonder if you are hiding something.
Always double check your application. , Inquiries are made whenever you apply for credit.
Requesting your own report also counts as an inquiry, but is usually not held against you.
At the creditor’s discretion, as few as four inquiries within six months’ time may be considered a sign of excessive credit activity.
The creditor may then presume that you are trying desperately to get credit and are being rejected elsewhere.
NOTE* Generally, several inquiries for a "major" purchase, like a home or auto loan are counted as "one" inquiry. , These may arise simply from typing mistakes, or from confusing your name with someone else’s similar name.
Since the credit bureaus handle millions of files, the possibility for error is substantial.
Errors can be found and corrected only by carefully reviewing your file for accuracy at least once a year and then taking the necessary steps to correct any errors that you do find. , Insufficient credit file.
Your credit history is too scanty for the type or amount of credit you requested.
You need to develop your credit history more fully before qualifying for the level of credit you are now requesting.
About the Author
Gerald Anderson
A seasoned expert in technology and innovation, Gerald Anderson combines 16 years of experience with a passion for teaching. Gerald's guides are known for their clarity and practical value.
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