Having a credit application declined by a financial institution can be quite discouraging. If you’re facing a financial emergency or if you need a loan in order to finance a project, being declined can be a setback.
What are some of the reasons for having your credit declined?
Identity theft is on the rise all over the world. One way you can keep track of your identity is by monitoring your credit report. Identity theft can inconvenience you especially when you need to get access to additional forms of credit. By law, you are allowed one free credit report check a year. Check your credit report to monitor any suspicious activity.
Being a high-risk client
If you haven’t paid your debts back on time it’s important to work on changing this. You need to ensure that you meet your payment obligations on time. Credit providers regard you as a risky client if you don’t pay your debts on time.
Having a negative credit report
A credit report reveals past and present loans, credit cards, mortgages and any other reported debts. It discloses the status of these accounts, whether up-to-date, overdue, paid in full or whether there were any collections. A credit report will register the severity of your overdue accounts.
As a credit-active consumer, it’s important that you check your credit report at least once a year to make sure that the information listed on it is correct.
Lack of affordability
If your credit has been declined due to a lack of affordability, this generally means that you don’t qualify for a certain level of credit. As an alternative, you could always ask the credit provider if you qualify for a smaller amount. You could also work on remedying your credit by working on reducing your expenses and paying off existing debts. Another way of qualifying after your credit has been declined is by paying a large deposit.