Credit 101

10 Reasons You Were Rejected for Credit

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Serious delinquency, derogatory public record or collection filed

Image: Zach Klein

What it means: This can mean your credit report includes a bankruptcy, judgment, tax lien or collection account. Bankruptcy remains on your report 10 years from the date you file (7 years for a completed Chapter 13); paid judgments can be reported for 7 years but unpaid judgments can stay on there even longer; paid tax liens are removed 7 years after being paid, but unpaid tax liens can remain on your report indefinitely; while collection accounts may be reported seven years and 180 days from the date you first fell behind with the original creditor leading up to the account being turned over to collections.

What you can do about it: If the information is accurate, then this is also a matter of biding your time and making sure you have as many positive credit references currently reporting as possible. (A secured card may be an option if you can’t qualify for a regular credit card.) And while paying a collection, judgment or tax lien won’t likely change this factor in the short run, it could result in the public record item being removed from your report sooner, and protect you from being sued for a debt which could result in additional judgments or collections on your credit reports. If dates are incorrectly reported or payments are not being reported — not uncommon with collection accounts — dispute them.

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Reason 7: No recent revolving balances (or no recent bankcard balances) »

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  • Bill

    It seems almost impossible to be approved, there are soo many hoops you have to jump thru and I am beginning to feel as if they are looking for reasons NOT to approve you rather than doing anything to help an individual! It seems like such a racket that you don’t have much control over, yet it has all the control over your life! Just doesn’t seem fair!

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  • Be-Be Gee

    What’s all this about why you’re rejected – each reason is sometimes contradicting the other – to much credit, not enough credit, to recent inquiries, not enough recent balances. All the lenders play games and pick & choose who they want to approved and deny. A lender gives you a $5,000 limit, but penalizes you if use the limit, by lowering your credit score. If you dont want the consumer to use that amount don’t grant that amount. But I thought it was given as as option to use as long as you’re making at least mimimum payments on-time. Knowing this, what do you do not use the cards and then you;re penalize againg for not using (no history of payments)

  • http://M.S.N. michal flansburg

    IT all boils down too this and what america was based on Trust , we have no more trust just more greed, too many hard working americans are being taken advantage of and its gotta stop. We working americans can pullout of these hard times if given a chance ie a little bit of credit. sincerly yours michael

  • tran

    I have perfect rating on Discovercard, I pay off ALL balance each month with them for 3 years, I paid on time 100% with them for 3 years. When I asked DISCOVERCARD for a credit increase, they promtly denied me because they said I have a low credit score…based on TransUnion, Experian, Equifax credit report. WTF????

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