These days everyone knows about credit scores. Most banks print credit scores on monthly credit card statements for customer reference. Loan companies like Buddy Loan provide features like Buddy Score, where anyone who needs to check their credit scores can apply with a few basic steps and get reports in just 2 minutes with 0 costs for free. However, lenders will only provide personal loans to people for the sake of having good credit scores. Thus check out these few reasons that will explain why people have good credit score but still rejected
6 Reasons For Personal Loans With Good Credit Scores
Look into some of these personal loan rejection reasons, assess and understand then apply for loans so that no one will face rejection.
What Credit Scores Are They Using Anyway?
I often hear people saying I checked my credit scores. However, please be careful where you're pulling out the credit scores and for what purposes. If anyone wants to take personal loans in India, check credit scores from Buddy Score since they will give you the most accurate and certified Experian credit scores by RBI ( Reserve Bank Of India). Thus take it from here before you apply for personal loans. You'll get instant funds.
Minimum Income And A Sustainable Job
Lenders approve loans primarily based on income and credit scores. Thus having sustainable and good pay with an excellent salaried profile will instantly make you more eligible than the rest. Profiles like doctors, police, and officers will make you more qualified to receive approval immediately in India.
Lenders would want to know if you're reliable and can pay all the repayments on time. Thus they use a tool called debt burden to follow up on each individual's monthly repayments on the credit reports. The payments will include mortgages, auto payments, credit card payments, and many other monthly payments. So typically, your monthly repayments will be divided by gross salary. So finally, if the repayments are 50% more than your gross salary, you'll most likely receive a rejection. If, otherwise, the person has below 40% repayments, then the individuals have a good chance of loan approvals.
Displeasing Credit Report History
All past repayments or debts and complete information of credit reports of the history will be recorded in credit reports. So the more negative information one possesses, the lesser credit score one can have. However, sometimes individuals can have good credit scores despite having a bad history. Anyone having bankruptcy or heavy debts beyond their ability for a more extended period can get individuals into problems. Lenders might check on these past activities of an individual and reject loans.
Thus now you know some of the most basic facts that will reject your personal loans.
So What Should Individuals Do Now?
Credit scores were the most important fact, but now there are many other factors like debts, payment delays, the individual's regular income, etc. Thus try to keep your credit behavior always clean.