When an application for credit gets rejected it’s upsetting. What’s worse is when it’s because you were only a few points shy of the lender’s requirements, or inaccuracies on your credit report dragged down your credit score. Often these things go unnoticed until the rejection comes in the mail, and disappointment sets in.
Lending standards are tighter now than they have been in the past, so it’s important to check-out your credit before you allow a lender to make a critical decision that determines whether or not you’ll have access to additional money. However, if you’ve already been rejected, banks and lenders have the ability to conduct a "second review" of a borrower's credit application, especially if the applicant is close to meeting the loan requirements.
Second look programs allow lenders to search for credit report errors or unreported income that may have a positive impact on the applicant's eligibility, according to the Wall Street Journal. This is a little-known fact that most lending institutions do not share with their customers. If you feel you qualified for a mortgage or personal loan, ask them to review your file again. But first, understand why you were rejected.
- Review your report for errors before you submit a loan application. Be sure to dispute errors.
- Know your credit score beforehand too. Lenders will usually tell you what their credit score requirements are up-front, so make sure you fall within their parameters before you apply.
- Raise your credit score by paying your bills on time and settling any unpaid balances. Do not apply for multiple lines of credit before and during the application period to avoid too many hard inquiries on your credit file.
- Report all income. Your credit report and credit score are important factors in loan eligibility, but income plays a role too. Disclose investments, assets, business ventures and any other funds that boost your income levels.