Personal Finance and Family Finance ideas and articles from an LDS perspective.

Rejected!

With recent challenges in the financial sector, it is increasingly becoming more difficult to receive approval for a loan. What can you do to help your chances for approval? What do you do if you are rejected? Here are 5 things to do to get you started:

Have the Right Attitude
First, recognize that plenty of wonderful Ladder-day Saints are turned down for loans every day. Your credit score and eligibility for a loan does not reflect your level of righteousness. You should also understand that borrowing money is a privilege - not a right. Nobody has to give you money for anything.

Don’t Be Silly
PLEASE! Stay away from PayDay lenders and high risk lenders. If you are rejected, try your very utmost to avoid shopping around at places that will give you a loan, but charge you 20% and more for it!  If you can find a way to put off your purchase - do it, and you’ll save yourself thousands.

Control Your Payments
If you’ve fallen behind on payments - now is the time to correct the problem - not later. Ask for help from family or the church if you have no other alternative. You have help. Late payments, collections, and court proceedings hurt your credit score (and thus your chances for approval) more than anything else. Fix them now, and do your best to stay on top of them in the future.

Decrease Your Debt
Once you’re caught up on your payments, start work on decreasing your debt. Start with credit cards that carry your highest interest rates. Try to get them paid down to below 20% of your credit limit on the card. The higher your balance on a card, the more it will hurt your credit score.

Don’t Shut Down!
If you forget everything else - remember this one tip - DO NOT close accounts when you’re finished with them as this will negatively impact your credit score. The length of history on your credit report is a positive contributor to your credit score - so keep those old accounts open.

Implementing these steps may take some time. Find some help, have faith, and do your best.

Want more detail? Ask a question and we’ll get into it.