What to Do if You’re Denied Credit
I just read about a nifty tool at reasoncode.org to help find out why you may have recently been denied credit. Run by credit scoring company, VantageScore, the tool gives the explanation behind the confusing two-digit reason code included with your denial.
Find Out Why
Lenders are required by law to tell you why they rejected your application for credit. The problem is that the “why” is often just a two-digit code. When you match the given code to the glossary of terms you might find a vague or confusing definition. VantageScore is hoping that their new tool helps shine some clarity on why your application was denied. When you enter your two digit reason code you’ll receive a more complete breakdown of the explanation.
Monitor Your Credit Score
Knowing why you were denied credit is just the first step in rebuilding your credit score either before or after bankruptcy. Because your credit score can impact things such as whether or not you qualify to rent an apartment, credit card interest rates, and mortgage terms, it’s important to be aware of what’s determining your credit score. You can get a free credit report every year from Experian, Equifax, and Transunion. By staying on top of your credit reports and comparing them to the reasons given when denied credit, you’ll know what lenders are looking at when you apply for credit.
When you’re monitoring your credit reports you’ll know ahead of time if there are things that need to be removed. Taking immediate steps to challenging a mistake on your credit report will minimize the harm and get you started on rebuilding your credit score.
Rebuild Your Credit
I know there are a million articles out there that oversimplify the steps needed to rebuild your credit score. While we’re also guilty of trying to sum up a confusing topic in a few paragraphs, we do think that even a little knowledge will go a long way. Rebuilding your credit is really just understanding the basics and executing them consistently over time.
We’re always happy to help shine some light on the subject. We offer workshops on rebuilding your credit and will walk our Michigan bankruptcy clients through the process after they file. The first step, however, is taking control of the information in your credit reports and finding out what those dang “reason codes” even mean!
-by Nick Best