Loan application rejected? now what ?

Have you ever applied for an auto loan, a home loan or a personal loan? What if the loan application got rejected? What to do next? Rejection of any kind is one of the greatest fears that lie within us. But there is also a way to address this. Put on your thinking cap to understand what you should do next when your loan application gets rejected.

Know and understand: Check with the credit institution to know the reason for the rejection. Try and understand the reason. According to the Reserve Bank of India, "A bank cannot reject your loan application without furnishing valid reason(s) for the same."

Has the rejection happened due to a low credit score? Does it point to poor payment history? Are those reasons reflecting in your credit history? It's time to check your credit report to know the specific reason or if there is any other reason behind it.

Recheck your credit score: A low credit score could be one of the reasons why the credit institution rejected the loan application. There are several credit scoring models that different credit institutions follow - it could be its in-house scoring model or a credit score obtained from a credit bureau. It is advisable to check your credit score with one of the credit bureaus in the country to know how credit healthy you are.

Do an error check: A credit report contains your demographic details, credit account details and payment history. Do a check whether there are errors on your credit report related to your personal details or account details. If you find some information that is not related to you, it needs to be rectified and updated by the respective credit institution and then at the credit bureau.

Seek help: Do you need help to understand your credit report? Do you find it difficult to read your credit report? Credit counsellors can guide you in understanding and reviewing your credit report. They can also suggest ways to improve your credit score. Seek the guidance of these experts.

Rejections are always a learning experience. So stop worrying and be a little more alert, a little more prudent, a little more assertive and a little more proactive. Just be disciplined and a window will open again.

Check your credit score and repair it with service packages available at www.cibilconsultants.com

Courtesy: Business Insider

Source: Secondary

Misuse of Loan Documents affect your Credit Rating

We keep submitting our KYC documents such as Identity and Address proof (PAN Card, Aadhar Card, Passport, etc) for various purposes.

We apply for various loans for example housing loans, auto loans, consumer loans, etc. Even for buying a new sim card we need to provide our KYC documents. Not only documents, they accept those documents that are self attested i.e. signature on those documents.

With documents submitted for different reasons, there can be incidents where your documents could be misused. It can be used to apply for a credit card, home loan, auto loan, and for various financial purposes in your name. This can have a severe consequence on the credit profile as it can be termed as an inquiry in your credit report and greater the number of inquiries in your credit report.

 Misusing of documents can also result into identity theft. Identity theft is when someone uses your identity to apply for credit or loans. This will benefit the person who has applied for credit and can turn into a nightmare for the person whose name is being used.

 So here are some steps that should be taken care off:

• Keep your documents in a safe place, preferably in a cabinet or a lockable drawer.

• If your documents are lost or are misplaced, you should immediately file a police complaint. Also you should approach the concerned authority with a copy of police complaint filed by you.

• While submitting documents, you should write the purpose for which the documents have been submitted on that document.

• Digitizing documents is one of the best solutions to protect the risk of losing your documents.

• Checking your credit report timely will help you to identify the inquiries that an individual has not made and can take appropriate steps to rectify the same.

Don't let anybody harm your credit rating by using your loan documents secretly.
Check your credit report at www.cibilconsultants.com

Source: Secondary