Applying for a line of credit can be intimidating, especially if you know that you have a less-than-perfect credit history. If you receive a denial after applying for credit, whether it was a loan for a new home in Chicago or a new credit card, you can use it as a learning experience and begin improving your credit.
In the article “
Six Steps to Take if Your Credit Application is Denied,” the experts from the Equifax Finance Blog list certain things you should do after being notified of the denial:
- Read the disclosure letter that the lender sends you, which should list the reason your application was denied.
- If you’re not completely sure why you got denied after reading the denial letter, ask your bank or lender questions and get clarification. You can even ask them to provide you with tips on how to increase your chances of being approved in the future.
- Once you’ve been denied, you are entitled to a free copy of your credit report, which can be requested from www.AnnualCreditReport.com. Be sure to review it thoroughly to discover some of the factors that may be hurting you.
- Along with your credit report, you should also review your credit score. This number is an indicator for lenders as to whether or not you are a creditworthy borrower, and a low score can cause you to be denied.
- Once you have determined the areas in your credit history that need correcting, take action to fix the problem. Whether you have late payments or too much revolving debt, it’s important to put a plan in place to help you improve your credit.
- The final step is to reapply for a line of credit. While it can take a significant amount of time to correct your credit report, it can be fixed, leaving you in a better position to apply and be accepted in the future.
To learn more about the ways to handle a credit denial, be sure to read the full blog post from Equifax.