Excellent Credit Score But Refused Loan
Evaluating Your Credit Report
There are some people who experience having excellent score but refused loan. You might be surprised that this could actually happen. If you are one of those who got their loan application declined, you might be wondering how it happened. In this case, there are several factors that you need to consider. Among these are a low debt utilization ratio, a long and healthy credit history, as well as adequate income to name a few. Londyn’s Financial Services LLC can provide you with insights on why good credit score refused loan Texas and how to avoid it.
Reasons Why Your Loan or Credit Application is Denied
- Not enough income
- Lack of employment history
- Too many credit card accounts
- Outstanding balances on your credit cards
- Credit history is spotty
- Filing bankruptcy
There are instances when your credit or loan application is denied even when you have a good credit score. You might think that being denied is personal, but really, it isn’t. Also, it’s not even final! If your credit or loan application has been denied, it is important that you find out why this happened. There are several possible scenarios for this that our firm can help you with. We can help you go over your credit report to identify the problem and from there, show you the steps on how to improve your credit score.
Understanding Debt Utilization Ratio
Determining your debt utilization ratio is easy. First, you need to take the total amount of your outstanding credit card debt. Second, divide it by the total credit limit that you have. The answer should be as low as possible. However, if your debt utilization is 50 or more, then it is highly likely that there are some red flags that appeared in your credit report. Take note that a higher number can mean that you are near to maxing out your credit cards.
Your Income
It’s uncomfortable to talk about your income with other people. However, if you were denied loan with good credit, then it might be something to do with your income. Financial institutions do consider whether you will pay your debt or not but they are also looking into your capability of paying your debt. This is where your credit score and income will come in. Although you don’t have control over your income, it is possible to apply for a credit card but with a smaller credit limit.
Credit History
When you are still young, you will not be able to build up your credit history just yet. But don’t worry. The more you pay your loans on time, the better your credit score will be. This will help make you look good in the eyes of banks. Take note, however, that your credit age is determined by the average of all your active credit accounts. The more you open new credit cards, the lower your credit score will be.
On a good note, if you were denied a loan with good credit Texas, it might be because your age is not at the right number. If you want to know why you were denied in the first place, let us help you out. Give us a call today and we’ll look into your credit report to find the problem.
