Understanding your credit score can be a challenge, but when it comes to being rejected for payday loans, it can often be difficult to determine the main reason why you have been rejected.
To help you understand some of the variables that could leave you to be rejected for a payday loan, we have compiled a list of the 5 main variables that could lead to this outcome.
The Lender May Not Think It Is Affordable For You
When applying for a loan, it is down to the lender as to whether or not you are eligible for the loan type that you are applying for. Therefore, one of the reasons that you may not have been accepted for your payday loan is that the lender believes that it is not affordable for you.
The Lender Was Put Off By Your Credit Score
Another reason why you may be rejected for your chosen payday loan is the state of your credit score. If you have poor credit at the time of applying, this can have a significant impact on your chances of being accepted for this loan type. Though there are bad credit payday loan options available to you, you can better your chances of being accepted by bettering your credit score before applying. This can be done by paying off outstanding debts and making sure that all your information on your credit score is correct, this will better your chances of being accepted in the future.
You Don’t Have Enough Credit History
If you are someone of a young age and have recently been rejected for a payday loan, one of the main reasons may be that you do not have enough credit history. If this is the case, it is advised that you work to build up your credit score beforehand to better your chances of being accepted.
Whether this is setting up monthly direct debits or using a credit card to build up lines of credit, this can better your chances of being accepted the next time you apply for a payday loan.
You Didn’t Pass The Eligibility Checks
Every payday loan lender has eligibility checks that they conduct when you apply. Though there is an eligibility check to give an initial response to your request, the lender looks into your monthly income as well as several other variables to determine whether or not you are eligible for the loan amount that you have requested. Therefore, bettering your credit score as well as your line of credit will prevent you from being rejected should you apply again.
You Are Not Currently Employed
The final aspect that could have a significant effect on your ability to be accepted for a payday loan is your employment. Without monthly income coming in, you are likely not to pass any eligibility checks from the lender. Therefore, it is in your best interest to make sure you are in employment beforehand to make sure you are bettering your chances of being eligible for a payday loan.
Whether you are looking to build your credit at this time, or you have been rejected for several payday loans with no explanation, several elements can impact this.