Sep 30, 2010
If you have been rejected for a loan, credit card, or mortgage, it is usually because your credit score has been deliberately stagnant probably due to missed payments. Rejection is somewhat hard to accept, especially if the reason for the refusal is not clear.
Lenders make use of credit scores to distinguish who will be granted a loan. They also determine the rate of interest and credit limits based on credit scores. Creditors will require copies of your credit report whenever you apply for a loan. These requests accumulate points which are added to your credit score and remain on your report for a span of 3 years. The points will then be deducted from your score, if you obtain points that are more significantly more than your credit. One way to manage and tally these requests is to obtain a copy of your free credit report. These are the same reports as the ones viewed by creditors when you apply for a loan or a credit card.
At the event of loan rejection, the lender will be required to disclose the reason for rebuff, which will clue you into your credit and any fixes needed. President Obama recently signed a financial reform bill mandating lenders to provide a credit score copies to the consumer. They will send the copy that they used to come up with the decision of refusal for the loan. Lenders will also need to provide a free credit report if a loan with a greater interest is being given over the rate given to borrowers with a good credit record. The law guarantees that you’ll get the precise score that was used as a basis for the loan acceptance.
Lenders and credit bureaus utilize different scores to assess borrowers’ credit standings. That simply means that mandating free credit scores for everybody might be a problem. So for your convenience, free credit scores are also made readily available by means of subscription to one of the several credit report monitoring services provided by the credit bureaus themselves and other reliable sources. The federal government demands consumer reporting companies must supply a free credit score copy per client’s request once every year.
The best way to avoid any problems is to determine if there are any doubtful situations before applying for the loan or credit card. Acquiring a free credit score on the internet will help you check out all aspects of your credit report. It will help you gain a better understanding of what would need to be done to fix any damages. It saves you valuable points that add up every time you are rejected for a loan and will eventually lead to greater results of loan approval with smaller interest rates.
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