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Don’t you wish personal finance was a mandatory course in college? Unfortunately, many of us learn by mistake. When you need a personal loan and get rejected, you may be confused as to what went wrong- and how to fix it. Here are some clues.
no credit
No credit is a situation where you have never used credit and therefore have no credit history for the bank to review. You have no way of making an educated decision about whether or not to repay a personal loan based on your credit history. No credit is worse than bad credit. Qualifying for these early forms of credit and making regular payments can overcome a “no credit” score:
· student loan
Secured Credit Card (includes a down payment amount)
Good credit for parent or spouse being added: cards, car loans, etc.
low credit
Low credit takes many forms. If you are using more than 30% of your allowable credit, it can negatively affect your score. Too many inquiries related to loan for purchase will also affect you badly. Defaulting on payments, defaults, or bankruptcy are huge red flags and can take a long time to rebuild.
Other things the lender can look at is whether you have a large asset should you default on the loan. They also check to see if your loans are diversified or if you are taking only one type of loan.
Income
Income proof is generally required while applying for a personal loan. If you are unemployed or underemployed, this can work against you in the loan approval process. Lenders may need a work history to see how long you’ve been with your current employer, and to determine whether you’ve generally had job stability. Losing or changing jobs frequently will tell a creditor that your payments may not be reliable.
Purpose of Loan
Believe it or not, your application may be rejected because of your proposed purpose for the loan. Financial institutions have the right to set parameters around their disbursements and may approve or deny your application depending on the type of money you want to use.
blacklisted
If you have defaulted on loan repayments in the past, your name may be put on the no-loan list, also known as the “blacklist”. It will follow you for a long time and will be difficult to eradicate. If you resolve debt issues, obtain documents to certify the resolution.
no credit check loan
If you need a loan now but are concerned that you may not qualify for a personal credit line, you may qualify for no credit check loan, You could be on your way to a better financial future in no time!
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