A person having a stable job with a decent salary, in a reputed company may feel that getting a loan will be a smooth process.

“Jim, one of my clients, had a problem in obtaining a home loan due to some of his delayed payments several years back. At first when he approached to a bank his loan application was rejected and he thought that there was some issue with the bank, however when his application was again rejected by the second bank too, he knew that something is wrong or missing due to which he is not able to obtain a loan”.

“Jim soon realized that he had some dollars remaining due in his credit card. Most of us face such situations and finally end up paying higher interest rates”.

Some of the reasons which can lead to your loan rejection are:

  • Non-payment of dues – If a person has genuinely not paid his dues, it will be noted in his credit score. It seriously hampers your credit score and you find it difficult to avail any type of loan.
  • Human Error – By human error if any of your payments is not updated, it lowers your credit score.
  • Settled accounts – There are instances when you and your bank end up in a mutual settlement of your loans. Suppose you pay 60000 for a loan payment of 100000, the remaining 40000 is taken as loss and is shown in your credit score card. This is another reason for rejection of your loan application.
  • Loans not closed properly – In some cases even if you pay all your dues, there can be a chance when bank forget to enter it in your credit report which can create problems in future. Thus, make sure that you follow up with your banks and remind them to enter your payments in proper records.

As per the law, credit information is retained for seven years. Thus it is important that we be more careful to see whether banks enter all our payments correctly to prevent any hassles in future.

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