Getting a Personal Loan Declined: How to Apply Again (Part 2)

When we started this series, we introduced to you the things you should know about why your personal loan application may have been declined. Indeed, there are many possible reasons behind it. Now, we’re going to take you further and discuss the possibility of applying for a personal loan again after being declined. Read on to learn more.

The Most Typical Explanations for Credit Application Rejections (Continuation)

  • Overloading on Credit Products

If you’ve applied for credit everywhere, you may have a desperate credit background. It makes lending to you risky and makes potential lenders think you might not be able to repay debts.

  • Credit Report Mistakes

The frequency with which Canadians discover mistakes on their credit reports may astound you. Identity theft and lender conflicts are a couple of them. The best way to prevent or rapidly fix this is to monitor your credit report. The best course of action in these situations is to get in touch with the provider.

  • Ongoing Debts

Maybe when you terminated your cable account two years ago, you didn’t return your PVR, or maybe you haven’t made a payment on your Canadian Tire credit card in over a year. When a debt enters the collection phase, it seriously harms your credit. If there are any collection issues, you must fix them before asking for a loan.

  • Incorrect Paperwork

This is the most typical justification for credit rejection. A comprehensive review of your application might find a mistake.

  • Fresh Employment

In order to guarantee that you won’t lose your job and be unable to repay the loan, lenders demand a history of consistent income. Your new job might have been a factor in your rejection.

Second, Correct Any Mistakes on Your Credit Record

Make contact with the offending party and have the mistake quickly fixed. Inform the authorities and the impacted financial institutions of identity theft or fraud. Start with a protected credit card or a credit-building loan if you don’t have enough credit. Reduce your debt if the percentage of cards you use is too large.

Third, Improve Your Credit

Prompt payment is a good start, but this task is much more difficult. After all, your credit score is impacted by numerous variables. 

Use your card no more than 30% of the time. Make monthly payments on schedule and in full. Your credit score will rise faster if you pay more than the least on your credit card balances. 

With higher credit card payments, credit scores rise more quickly. For the time being, get a secured credit card or a loan to build your reputation. Your credit score will rise as a result of protected credit cards and credit-building loans.

Fourth, Choose the Right Lender

Take into account the loan’s terms and interest rate. Regardless of your credit score, be wary of lending organisations with high approval rates. Remember to read reviews if you are not acquainted with the lender.

Fifth, Apply Again

You could track the increase in your credit score throughout the earlier phases with the help of a credit monitoring package from Equifax or TransUnion. Additionally, you’ll be aware of when to reapply for a personal loan and what information a prospective lender will discover in your credit report. Once your credit rating has increased, submit a new loan application.

Conclusion

Fortunately, there are ways to rebuild your credit in a relatively short amount of time. Remember this information to increase your odds of getting a loan approved. To improve your chances, diversify your credit goods by including both revolving and instalment types. A secured credit card or a loan for credit enhancement can also help you raise your credit score.

Are you looking for personal loans? 365 Loans Canada is here to give you access to financial solutions for whatever you need. Contact us today to learn more!

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