Worried about the prospect of having your loan denied? For various reasons, this often happens to different people but there are certain measures you can take to improve your credit worthiness in future. Below are four recommended moves to make if your loan is denied.
The first thing you should consider doing after loan rejection is to order your FICO credit scores. These are very important when applying for a loan and most quick personal lenders reject applications with weak FICO credit scores. These weaknesses can be attributed to factors such as history of late payment of bills as well as missing payments. The FICO credits scores can be obtained from different national credit bureaus that oversee the operations of financial institutions that deal with money lending.
The second move you should take after your loan application has been rejected is to obtain your credit card report which is often obtained from different bureaus that specialise with credit issues. These reports give you details about your credit history and it is your responsibility to read them carefully. You need to make sure that there are no mistakes made on them since this can compromise on your credit worthiness. For example, it may appear that you have not repaid a certain debt or delayed repayment whilst you have properly done so. You should make sure that this information is corrected since this may compromise your ability to get your dream loan in future.
The other measure that you can take is to try to pay all your bills on time in future. This significantly increases your credit score though it may take some time to achieve a positive result. The lenders are wary of your trend in paying up your bills before they release a loan to you. There are long term benefits that can be achieved from keeping a clean record of bill payment since this helps to create trust in you among the lenders. There is no other guarantee that can convince the lenders that you are capable of repaying back your loan apart from viewing your track record with other financial institutions.
The fourth and very important step you can take improve your chances of loan approval in future is that you should always strive to maintain your monthly debts at minimal levels. For instance, many lenders require that the debt-to-income ratio should not be more than 43 % of the monthly gross income since this will give a bad image about your credit worthiness. There are high chances of the loans being denied if the monthly debt-income ratios are very high since this will portray a negative image that the borrower heavily relies on debts for sustenance. This creates a very bad image since the lenders need to be convinced that you have a genuine cause for applying for a loan. However, if the previous trend shows that you survive on debts, then chances of the loan application being rejected are high.