Reason Behind Loan Rejection Despite A Good Cibil Scoreby Kirti Singh Content Marketer
A good CIBIL score in credit reports helps in getting loans easily. Perhaps, there are still chances behind the rejection of a loan. The possible reasons that block borrowers to get a loan are listed in this article.
Reasons For Loan Rejection
A set of reasons that could pause your credit approval process is provided below. Examine all of the factors thoroughly, and if any of them sound familiar, make sure to rectify them before applying for another loan.
Credit Borrowing regularly
Even if you repeatedly refund EMIS or credit in time, the lenders always question your dependence on credit. Then, you will remain a risky applicant for them. In addition, they will be hesitant to offer you a new credit amount as they think you will become overloaded with a new credit amount, which will result in a missed credit repayment or delay.
Comment on CIBIL Report
The comments mentioned in the CIBIL Report are another reason for a loan application rejection. Any comment on the report demonstrates the applicant's carelessness or poor reimbursement habits. As a result, it is strongly advised not to disregard the comments in a Cibil report, because lenders use the applicant's credit report before offering credit.
Instability in your job or salary
Denial of credit applications may still be possible if salary or employment is unstable, or the organization is blacklisted by the bank. Furthermore, if you change your address or job too frequently, it will leave a negative impression on your credit report. Which eventually pause the loan approval process. Every type of insecurity makes lenders and financial institutions more cautious about their applications.
Information that corresponds to the defaulter's information
The credit report includes user information such as date of birth, residential address, age, gender, employment, and other relevant information. If any of the information matches the details of the defeat, such as the address, the chances of rejecting loan applications increase even if the borrower has a good CIBIL score.
History of Tax Payments
Another reason for the rejection of the loan application is the irregular tax payment. A person who has not paid his income tax returns on time in the last two years is more likely that he has rejected his loan application even after a good CIBIL score.
Loan Rejection in the Past
Your credit report tracks all loan applications that have been rejected or approved in the past. The lenders take out credit reports each time a new credit is applied to verify credit history. If there is a loan rejection history, your new credit application request can be rejected as well. So, request a new loan after having paid all your previous credits.
Co-Applicants Poor CIBIL Record
If you apply for a joint loan, your co-applicants credit record also comes into consideration. If your co-applicant has a low CIBIL score, chances are your credit application will be denied. Hence, you should check the co-CIBIL applicant's record before applying for a loan.
Unbalanced credit (Secured & Unsecured)
A healthy mix of unsecured and secured loans is essential for a strong credit score. If you can't keep a balance between Secured and Unsecured loans, lenders will consider you a credit-based debt applicant. That will result in your credit application rejection.
Several Hard Inquiries
Soft inquiries are ones conducted to check a person's credit score or report. A hard inquiry, on the other hand, is when a lender pulls your credit report to check your credit history. If lenders make numerous hard queries, it suggests you've applied for a loan multiple times, which isn't a smart practice because it could result in a credit application being rejected.
Failure to provide complete financial information is another reason for a credit application rejection. Even if you have a great credit score, lenders always look at your financial summary, and if there is a flaw in it. The chances of your credit application rejection are significant even if the applicant has a good CIBIL score.
Failure to confirm details
If the bank or financial institution is unable to verify your details, such as income, address, and job evidence, leads to loan rejection.
Age of the Candidate
If the applicant is approaching retirement age, his or her credit application may be denied. Due to the possibility of 0% repayment capabilities, lenders, banks, and financial institutions are cautious to issue credits to such individuals. As a result, when it comes to acceptance or loan rejection, an applicant's age plays a significant impact.
Created on Oct 5th 2021 00:57. Viewed 208 times.