rejected for a loan can feel like a kick in the teeth. No way around it,
rejection is painful. But a loan rejection may be a gift in disguise. All too
often, borrowers get the loan they want and end up wishing they hadn't because
they can't afford the payments.
good reasons for denying loans; they need to know you will be able to repay the
amount you borrow from them. With some effort, you can turn your credit
situation around so that you get approved for a loan you can afford the next
time you apply. Here's how to get started.
- Find out why you were rejected—Upon reading those "We are sorry but …" words in your
rejection letter, you may feel the urge to crumple and pitch the letter into
the trash. Instead, read it, in full. That letter has useful information about
the exact reasons for your loan denial. Maybe you're late on paying bills, or
the lender feels you're already borrowing too much compared to your income.
- Get a copy of your credit report—The denial letter also will state which credit bureau the
lender used in making the loan decision. And it will tell you how to contact
the agency to obtain a free copy of your credit report. Get a copy and check it
- What to do if you find errors—Mistakes are not uncommon. If you find any errors on your
report, contact the credit bureau. Ask that a corrected copy be sent to any
lender that recently received the inaccurate report. Check for errors in your
report at the other two bureaus, too.
- Get expert help—Start
by talking with the people at your credit union. Someone there may be able to
work with you to devise a credit repair plan, or you may get a referral to a
free or low-cost outside counseling resource.
With a little
investigative work and some clean-up, you'll be on your way to getting a "yes"
on your next loan request.