A loan rejection can come as a shock, even when you have a high ‘my credit score’. Borrowing takes place with the help of various parameters and factors kept under consideration. It is true that a credit score holds a lot of financial significance, but there are other factors too. Therefore, it is possible for an individual to face rejection even after having a high Experian credit score. If you have faced a similar situation, you need to understand the following top 12 reasons why your loan has been rejected:
1. Multiple loan applications resulted in the loan being denied. If you end up applying for multiple loans within a very short span of time, you will face rejection.
2. Low income is one of the vital points to consider. An individual with a high credit score but low income faces loan rejections easily. Without sufficient income, a loan provider will not grant acceptance.
3. Individuals with tax problems can face loan rejections. It is important for individuals to maintain a proper income tax return. Therefore, this can be one of the reasons your loan gets rejected.
4. A high debt to income ratio It’s one of the reasons why your loan application could be rejected. Having multiple loans at the same time can be risky. Therefore, a loan provider rejects the loan application straight away.
5. A high credit utilisation ratio leads to loan rejection. If you have exhausted 100% of your credit limit in your credit accounts, you will not get approval.
6. Missing payments or delayed bill payments will immediately lead to loan rejection. If you do not pay your bills on time, you will not get a loan application accepted. Payment is a vital parameter for good credit eligibility. For Business Loan visit : business loan apply online.
7. A past history of bankruptcy can lead to a loan rejection. If you have a bad credit history, it can impact your present borrowing experience. Therefore, make sure the scars of bankruptcy have been deleted from your credit report.
8. Do not delete your credit accounts with a long credit history. A long credit history always impacts your credit eligibility. Too many new loans added to your credit profile can lead to loan rejection.
9. An incomplete application can lead to a loan rejection. If you find that even after having a good credit profile, your loan gets rejected, this can be the reason.
10. Documentation is important for loan applications. If you are not able to provide all the required documents, your loan application will be rejected. There are cases of forged documents that straightaway lead to rejection.
11. Due to an unstable business or employment history, you can get rejected straight away. If you do not have a stable employment history, loan providers will not trust your stable income.
12. Legal issues can be a reason for your loan application getting rejected.
Finishing up
How to check your credit score? Find the ‘my credit score’ option on the Clix Capital website. You can quickly check your credit score here.
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