Why Your Loan Application Is Rejected Despite Of 750+ CIBIL Score
Your CIBIL score is more than 700, still your loan application has rejected…why?? You may have been confident of getting your loan approved hence; meticulously planned your arrangements but in vain. You even hit a 700+ CIBIL score. Now, you are just few steps away from your loan approval and submitted your loan application along with your highly respectable credit score.
It seems there was a surprise waiting for..perhaps a bad surprise….”REJECTION” on your loan application.
CIBIL -Credit Information Bureau (India) Limited maintains credit files of over 600 million individuals and businesses across India. CIBIL score or credit score enables a bank to get an insight of your credit history. The banks wanted to assure if you are regularly paying back your credits on time or not. It is basically a concern for them to know how much loan you owe to banks, your monthly EMIs, credit cards you are using, etc. A number above 700 on a scale of 300 to 900 shows you have a fair chance of getting you loan approvals.
Below Are Some The Possibilities Why Your Loan Got Rejected Despite of 750+ CIBIL Score
1.Critical Remarks On Your Credit Reports
You credit report is plagued with unimpressive remarks such as “Settled” or “Written Off” status. Banks and financial institutions do get concerned of giving loans out to individuals who have such remarks on their report irrespective of 700 CIBIL Score.
These remarks indicate that you didn’t make the payment in past or when you did make the payment, you only settled with the bank that is again did not pay in full. A lot of banking agents will insist that you go with a “Settlement” with a bank as you don’t have to pay the full amount, but you should never get lured and always go for a full closure.
2.You Have Availed A Lot Of Credit Within One Year
These days, banks have become strict when it comes to poor CIBIL score. Due to bank’s internal policies they do not sanction loans with CIBIL score less than 750. For those seeking, personal loans or any other such loans with poor credit might get loan approvals with higher rate of interest and for short duration.
3.Your Income Is Insufficient
Your credit score does not measure how much money you make. Most credit scores focus on your payment history, your total credit card debt and the history of your credit file. But the credit reporting agencies do not know your income.
Poor CIBIL scores doesn’t affect your income, but banks does. They look at how much a loan applicant makes per year, as well as how much debt they have to their name. And they look at the combination of the two — how much debt someone is carrying vs. how much they’re making. There are also minimum salary requirements and/or maximum total debt requirements for certain kinds of loan approval, and if the loan applicant doesn’t meet them, the application is rejected.
4.Your Loan Application Has Been Rejected Earlier
It may seems to be minor thing; but your past loan rejection can reduce your chances of getting your loan approved irrespective of 750+ CIBIL Score. Every rejection that you get from the bank in the past is accountable in your CIBIL score. Think twice before applying application in different banks. Have patience, so that you can update your CIBIL score before you reach another bank.
Getting a good CIBIL score doesn’t mean you are fulfilling all other criteria. Because; with every rejection your score gets affected and update in the CIBIL report.
5.Your Address Is Filed Under Defaulter’s List
All the banks and private financial institutions maintains the list comprising a detailed information of the individuals who were defaulted in repaying their loans. If the details filed by you with a residential address mistakenly matching with the one of the defaulters staying under the same roof, there is a strong possibility that you can face loan rejection.
6.Becoming A Standing Guarantor Of A Defaulted Loan
One of your relative or friend have asked you to become their guarantor. For the sake of relation, you agreed to become one, but; after certain point they failed to repay the loan, becoming a defaulter. This directly defers the chances of your loan approval as well. Because; being you role played of “Guarantor” it makes you to become accountable to repay it on their behalf. Therefore; the bank will report the same to CIBIL and will also make you defaulted.
7.Low CIBIL Score Of Co-applicant
Even though you have a 750+ CIBIL score, it is equally important that the co-applicant has substantial CIBIL score. If your co-applicant is listed under the defaulted list, then for the same reason your loan application gets rejected.
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