Reasons Why Your Credit Application May be Rejected Even with Excellent Credit

November 29th, 2017 | Author:

[I]f you have been told you have excellent credit or your credit score is in the upper 700s or even 800, you may think the sky’s the limit on applications. You get a wake-up call when a creditor tells you that your application has been rejected. How could this happen to someone with excellent credit? There are several reasons.

When Excellent is Only Good

Every creditor has a different scale for what makes up good or excellent credit. What may be called excellent credit for one creditor may only be good for another. They may approve applicants with scores above 800 while another would accept you at 780.

Make sure you read the fine print and try to apply only for credit you know you’re likely to get approved for. Of course, one denial won’t hurt your credit as much as it will hurt your pride, but you don’t want to apply for just anything.

Too Much Debt

While you may be managing your debt and even have an abundance of available credit, it could still result in a rejection if you don’t have the income to support it. Lenders want to see your credit payments below a certain percentage of your income, and if you go above that, you might be in trouble when it comes to getting approved for new debt.

Too many credit cards with high credit limits can cause lenders to worry. What would happen if you lost your job or had some unforeseen circumstance occur? Would you still be able to handle the amount of debt you have?

Negative Information

It is possible to rebuild your credit after having an account charged off, especially if it’s been two years or longer. However, that account is still on your credit history, and some lenders won’t look past it. They will refuse to extend credit to someone with any negative information. If this is the case, you’ll have to wait until it falls off before applying with this lender.

While you’ll likely get approved for most applications, be aware that excellent credit isn’t a guaranteed approval.

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