Why do lenders reject people based on their credit report?

Why do lenders reject people based on thier credit report? Your credit report is full of valuable information to a lender, including any defaults you’ve had in the past and your payment history for other loans (including home loans). If you’ve had a default, it could show to a credit provider that you’re not a reliable debtor, and they may not want to take that risk.

The same goes if you’ve been late for other payments before. You have a due date for most bills, like your home loan payments, and if you miss these on a regular basis it shows that you’re a poor financial planner, and it likely indicates to the provider that you’re going to pay them late as well. That’s not something they want to deal with.

A credit provider can also reject your application for credit based on a range of other factors outside your credit report depending on their lending policies and criteria. This may include your current bank balance. If it doesn’t show that you’re in a stable financial position, they may not want to deal with you (although your current money trouble might be the reason you’re applying for credit in the first place).

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top