Why was my loan denied? Maybe you have already asked yourself this question. In this article we will help you better understand some possible reasons that lead to a denied loan proposal.
When we apply for loans or financing, we usually have to meet some need or dream: repaying debt, paying an unexpected expense, buying a new car, or buying a home, whatever the case may be, we get frustrated when this proposal is denied!
But why was my loan denied?
Well, each bank has its credit rating criteria, but most of them use the credit score. It is made by statistical information and consumer personal data, to assess their financial life. That is, if you pay your bills on time, have a history of debt or even evaluate how much you spend and receive per month. This is why it is very important, besides having an unrestricted name, to track and analyze your daily expenses, as well as your credit score, so that this is not a problem when applying for credit.
“I pay all my bills on time and my name is clear and yet my loan was denied.”
In this case, it may be for the amount of the loan you want and your income is not compatible (read the Income Commitment article). Also the loan proposal may be denied when you already have many monthly commitments, these commitments may end up compromising your income. For example, other loans, rent, health insurance, among others.
If you are self employed, have little time working in a company or your income depends on commissions be careful. The bank may consider it much less stable than someone who is a civil servant, for exam.
It may also happen that your data is out of date, in federal revenue, in SERASA or in the bank itself. This will result in a proposal being automatically denied until you update them.
In addition, banks also take into account the economic situation of the country. In this way, they control the supply of credit when there is a financially unstable scenario.
Can the loan be denied because I had the dirty name?
Not necessarily your credit will be denied because it was once badly named, banks and financial institutions do a credit analysis which is a way to verify the credibility of those who will borrow and thus have a greater backing and guarantee of payment. For example, supposing you have obtained credit from a bank or financial institution, have had difficulty repaying it, and your name has declined, even if you have regularized the situation, you are likely to be denied the loan.
How to tell if my name is dirty?
To find out if your name is dirty, just enter the Serasa website and, with your social security number, consult for free. This site also tells you which debts are in negative status, the amount, the date, and the company with which you have the debt.
Warning: If you have debts older than five years, they may not appear on this site. However, this does not mean that financial backlogs no longer exist.
Why clear the dirty name?
Because having a bad name makes it difficult to approve loans, make car and real estate financing, try a credit, get a credit card.
Not negative, your score is high, but not approved? Understand
You may find yourself in the following situation: Your name is clear, your score is high, and yet your loan has been denied by the bank or financial institution. What usually occurs is a problem with financial history for example: accounts that are already overdue one day, already negative or unnamed in the square, for example: no accounts in name.