What To Do If You've Been Turned Down for Credit
Getting turned down for credit--whether it's for a car, a credit card, or a house--can be an incredibly disspiriting experience that can leave you raw and turned off to the idea of credit entirely. We hear you. We've been there ourselves, and we certainly have had to turn down our fair share of applicants over the years. But being turned down for a loan is an opportunity to reassess your personal finances, and re-focus on your financial goals.
With almost 30 years of financial lending under our belt, we've discovered a few things that have been really helpful in our own lives and those of our customers. Here are our top three things to do once you've been turned down for a loan:
1. Talk with your rep. You probably won't have a finance representative at a credit card company, but most other types of lending involve loan officers or finance specialists. These are people who intimately know your financial history, and know where to spot weaknesses and room for growth. Shutting down conversations with them--especially after you've been turned down--ruins your chance to find out what needs to be fixed or improved. And if you don't know what needs to be fixed, then you run a high risk of getting turned down again and again and again. So keep the conversation going.
2. Listen to your representative's suggestions for fixing your loan application. After talking with your representative or account manager, it's important that you really listen to their recommendations for approval. Your reps exist to help you get the loan you're looking for, and want to see you succeed. They're your ally in rebuilding your credit, and making you a more "credit worthy" candidate for a future loan. Don't blow them off, or disregard their advice. Be polite, take notes, and say thank you :)
3. Work hard on your credit "to do" list until you're in a position to be approved. Now that you've spoken with your loan officer or finance specialist, it's time to start working on the list of things they've recommended doing to increase your chances of getting a great big YES! the next time you apply for credit. If they suggest reducing debt, then put extra cash--even if it's just a few bucks every month--toward your outstanding bills. If it's getting up to snuff on a lien or backtaxes, begin working on tying up loose legal ends. If you need more stability in housing, consider how much you move and why. Every move should be a necessary one--not just because you like living in a new space every 6 months.
Whatever your situation may be, it's important to take a hard look at why a lender doesn't currently find you to be credit worthy enough for the loan you want. In some cases, all it takes is just a few paid bills here and there, or saying NO to another move, or resisting the urge to splurge on a big ticket item that will compromise your ability to pay for the loan you want. Be patient with yourself during this process--and be patient with those trying to help you. At the end of the day, you'll be a lot happier if you do, and your chance of getting a bank or financial institution to take a chance on you will only increase.
Good luck, and keep your chin up!