When it comes to applying for getting financed for something, it’s important to compare options in order to determine which one gives you the best odds of being approved. Otherwise, you could find yourself unable to be approved to borrow money for whatever you are seeking it out for.
Whether it be for trying to purchase a home, a car, or start a business, it’s in your best interest to make sure that you get approved for being able to make your dreams come true. Here are some of the reasons you may not get approved, and what you can do to avoid them.
Poor Payment History
Failing to make payments on time can quickly start to make your credit score plummet. When lenders see that you have a reputation for failing to make payments on the date expected of you then you will find yourself with a derogatory mark on your name for years to come.
It’s important to be incredibly careful about paying on time so that you don’t have to live with this mark against you on your credit history. This will give you a checkered reputation which won’t do you any favors at getting approved.
Anytime that you have failed to pay a bill or have a claim against you which has gone to a collections agency, this will make a huge stain on your file. If a lender sees that you have an outstanding payment against you they are not likely to trust that you are worthy of being lent to.
Make sure that if you find yourself with an outstanding debt on your credit report that you handle it immediately. This can be done by either paying it or taking the actions necessary to contest it to remove it from your file.
Credit History Is Too Young
In the world of finance, young credit history is the same as bad history. Lenders want to see what kind of a past you have and whether you are able to handle paying things back.
Once you have established yourself as a responsible bill payer with a consistent pattern of paying your debts, you will be much more likely to be approved.
Large Amount Of Current Debts
Most experts agree that using more than 30% of your total available credit will cast a negative light on your name to potential lenders.
Make sure that you keep your debts down when seeking new loans. Otherwise, you’ll be seen as someone who can’t take on any more debt and may fail to make payments back. Therefore, you may want to consider paying off a portion of your debts before going to the trouble of applying for new loans which you may get denied.