What To Do if Your Loan Gets Declined?

Anelle Valdes
Anelle Valdes

Tips on how to get approved for a loan

Applying for a loan can be the cause of a lot of anxiety because if you are declined for the amount you have requested could mean that you don’t get that new car or other item you’ve been eyeing. In the case of an emergency, it could even mean you over draw on your account. That being said, that shouldn’t hold you back from applying for the loan. Here are some tips that you should follow if you happen to get denied for the loan amount that you have requested.

Review the notice if declined

When you get declined for a loan amount, an adverse action notice will come in the mail. You should review it and on that notice there will be the reason why you have gotten declined as well as contact information for any reporting agencies. You should reflect on why you were declined. You may have been declined because your credit score was too low and if that is the case then you should request a credit report. Credit reports will list out all payment history and if you have made a lot of payments that weren’t on time. By reflecting on your credit report, it can make you realize the importance of maintaining good credit in order to get the loan that you need. Sometimes mistakes from the credit agencies occur so also check for accuracy.

Learn about inquiries on your credit report

Make sure when you are applying for a loan you know whether it is a soft or hard inquiry. Hard inquiries can hurt your credit score if you have too many of them. Also make sure you do not apply to too many creditors at once because that could also negatively affect your credit score. If you have a credit score that isn’t too good, then you should familiarize yourself with what looks good on your credit report to credit bureaus. By doing so then you can make your credit report look out standing and get the loan you need much easier than if you weren’t to do so. Lastly, you should stay positive about building your credit so you won’t be stressed when you go out to apply for a loan after your credit is built back up. Here is a good article about what the credit bureau’s look for. Small steps really go a long way when rebuilding your credit. Happy rebuilding!

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