Avoid the Most Common Reasons for Credit Denial

Have you been subjected to credit denial? Learn how to get the loan you want, when you want it. Avoiding the five most common reasons for credit denial improves your chances of getting the loan you need to buy that dream home, new car or to just pay old debts.


  1. Avoid Delinquent credit obligations. Late payments, bad debts, or legal judgments against you make you look like a risky customer. Get A copy of your credit report and remove any errors.
  2. Double check your credit application. Credit application is incomplete. Perhaps you left out some important information or made an error on the application. Any large discrepancy between your application and your credit file can count against you. The lender will wonder if you are hiding something. Always double check your application.
  3. Know if you have too many inquiries. Inquiries are made whenever you apply for credit. Requesting your own report also counts as an inquiry, but is usually not held against you. At the creditor’s discretion, as few as four inquiries within six months’ time may be considered a sign of excessive credit activity. The creditor may then presume that you are trying desperately to get credit and are being rejected elsewhere.
    • NOTE* Generally, several inquiries for a "major" purchase, like a home or auto loan are counted as "one" inquiry.
  4. See if there are errors in your credit file. These may arise simply from typing mistakes, or from confusing your name with someone else’s similar name. Since the credit bureaus handle millions of files, the possibility for error is substantial. Errors can be found and corrected only by carefully reviewing your file for accuracy at least once a year and then taking the necessary steps to correct any errors that you do find.
  5. Consider that you don't have enough credit. Insufficient credit file. Your credit history is too scanty for the type or amount of credit you requested. You need to develop your credit history more fully before qualifying for the level of credit you are now requesting.


  • Avoid unemployment. That can seriously hurt your credit score.
  • A credit bureau may confuse you with another individual, may have erroneous information in your file, or perhaps may include false, incomplete or one-sided information that has been provided by a creditor.
  • If you are young with no quality credit history, tell the finance person before completing the application. There is no need to apply for that used car or whatever, if there is no chance that a person in your situation could get the financing in the first place.
  • Most of these credit denial problems can be resolved once you understand the procedures.
  • Find a large credit bureau in your area. Look for one that caters to helping people with their score and which has been in business a long time. Sometimes you may need to go to the next larger city near you, and/or pay a small fee (~$20-45 or so) to obtain personal service. Make your appointment and sit down with the most experienced person (preferably the owner or a partner of the business) and explain that you want to improve your credit rating. They will first print out your credit history. They will then go over it with you, line by line. Have them correct any mistaken information right then. They will tell you what you must do to fix each negative item and improve each positive one. If you follow their guidelines, you will do the best in the shortest period of time. Make this person your go-to person for all things relating to your credit history and score.
  • Always examine your credit record before applying for credit, because you don't want any surprises and have a credit denial letter sent to you.


  • Periodic checking of your credit report is important because credit bureaus can and do make mistakes in their credit information.

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