Credit Denied In Spite of No Negative Information on Credit Report

If you have no negative information on your credit report and you find yourself in the situation where credit has been denied you, then you must understand that the reasons for denial of your credit application may have nothing to do with your credit report at all. Ideally, you should get a letter from the creditor explaining the reason for declining the application or asking you to get in touch for an explanation of the same.

There are many factors that are lender might consider in approving of your credit application apart from your credit score. Even if the credit score is good then it is possible that the lender may demand a certain length and depth of the credit history which you might not have. For example if your credit history only goes back a couple of years, shows too few credit accounts then a lender might be hesitant in approving you for credit. The information on a credit report is like a reference of your credit behaviour. Not having a substantial credit history with substantial credit information on a certain number of credit accounts may make it difficult for a lender to evaluate you as a credit risk.

Other factors that are lender may look at are stability of job, income, residing arrangement (owner or renting) etc. Another reason that can influence the credit application is your prior dealings with the same company even though in another department.

There are other things on a credit report that can influence lender’s decision as well. In spite of not having any negative items on your credit histories such as late payments, delinquent accounts etc you may have a high balance to credit ratio which will portray you as a high risk in the view of many lenders. High balance on your existing credit cards may suggest that you are overusing your credit with the potential of defaulting on them in face of additional financial trouble.