3 Reasons Why Your Credit Application Is Rejected

If you’ve never been rejected for credit, count yourself as one of the lucky ones – you belong to a select group of people who are extremely good with their finances.

However, for the rest of us, there are times when our applications are rejected yet it can be difficult to understand why. So here are 3 main reasons why your credit application might have been turned down:

#1: Amount owed on accounts is too high

What this term really means that in making a comparison with other customers’ accounts, if your debt is much higher than theirs, this is a reason why the credit you requested for hasn’t been approved.

While it is difficult to ascertain how much debt is too high, the only thing you can do is pay off the balances on your credit cards before applying again.

#2: Too many recent inquiries in the past 12 months

This reason usually points to a large number of credit applications within the past 12 months not taking into account inquiries made by current creditors, employers, insurance companies and even the credit report checks made by you. However, there are other types of inquiries that can affect your score by five points or more.

#3: Level of delinquency on accounts

Very simply, the more you fall behind on your payments, the greater the impact it has on your credit score. Unfortunately, if the information is accurate, you’ll have to do without applying for credit for sometime lasting up to seven years. In the meanwhile, you might as well pay off your credit card balances on time – even if it means making the minimum payment.