Nothing is more frustrating than being rejected for credit. It comes with a little bit of embarrassment and some confusion as to why it happened. However, it might help to look back and find out why you were the recipient of a rejection and what you can do to change that in the future. No matter what the reason for the rejection, there is a way to turn the tables and get credit back on your side once again. It just takes a little time and some determination.
Poor Repayment History
When you don’t repay your debt correctly, it can hinder your credit score and result in you being rejected on a credit application. It might be that you were a late a few months on one of your loan payments. It might be that you had to pay less than the minimums for a while until you got your money straight. For whatever the reason, if you aren’t consistent when it comes to paying money back, you may be rejected for future credit opportunities.
You may think that it takes a lot to receive a rejection. However, depending on other factors that are taken into consideration, it could just take one or two late payments to set you back for a while. Though it will take a while, you should begin to pay your payments on time or even early from several months up to a year. This will show that you are working towards regaining your credit and getting everything in order. Be patient. It takes time.
Close to Credit Limits
If all of your other lines of credit are up to the limit or close, it can detract from your credit score, causing you to receive a rejection notice. In this case, it means that you aren’t a risk that the company is willing to take. They see the amount of debt that you owe and how close you are to running out of your lines of credit.
In order to get more credit, you need to pay down some of the debt that you owe or ask for an increase in your credit limit with a current creditor. Remember that he too will be looking at a credit report to make that decision. While you are paying your payments on time, consider adding a little extra each month to pay down the amount sooner.
Not Enough Credit Lines
If you are new to credit you may not be approved for a loan or credit card right away. Some institutions are wary to lend to a person that has never had to take out a loan or use a credit card. In this case, it is important to start out small and work your way to full-fledged credit.
You can start with a prepaid debit card or a credit card for people that don’t have any credit at all. From the beginning, make a plan to pay it off at the end of each month. Pay early and don’t let your payment be late.
As you begin to build up lines of credit, you will be able to apply for even more credit. The key is being responsible with your credit to maintain a high score and continue working with lenders in the future.