Credit Question...?
My fiance and I purchased a home a year and 6 months ago. We had some major dings in our credit but for two years straight we have been current on everything from cars, mortgage to credit cards. We tried financing an engagement ring and we were denied. We don't understand, how this happened when we have been clean and current. Can anyone relate, or suggest what the problem may have been, how we can help our situation or where can we go that has options for people with credit issues.
Public Comments
- Yes I can relate, I once had a 550 fico and hardly got approved for anything, after I fixed my credit the score jumped about 150 points. Lots of things play into your credit score and getting approved. Check out www.fixthisloan.com it has a credit section with articles about your credit report. Good luck!
- When you were declined, they should have given you a specific reason, if they did not you should ask for one. Even though you have financed other things through other places the jewelry store may have more strict credit rules so your credit may be the issue. Just to be on the safe side you should check your credit report at www.annualcreditreport.com to make sure there's nothing weird going on. Something else that creditors look at is your debt to income. That is basically what you owe vs. what you make. Every creditor has a different threshold for this so this may have been the issue as well. You should definately call the store back and get a specific cause for your denial.
- Don't bother calling the store, they typically do not know and personally I would find it embarrassing. Anytime you are denied for credit they must send an adverse action letter. In this letter it will state the reason(s) you were denied. If you do not get this letter, it is a violation of the FACT Act(They don't want to do that). Read the letter(looks like junk mail), order the credit report from that company(one of the CRAs) and review it for inaccurancies. Being clean and current doesn't replace the dings of the past, they stay there for 7 years. It also could be a debt to income ration, most places stick with 30-60% for approval, more being for secured(mortgage, car) and less for unsecured(credit card, which is basically what you applied for, personal loan or loc) My best suggestion, after reviewing these, check with your bank or credit union(or me, I do represent the loans at my bank) and typically their guidelines are less strict. But don't go looking for 0% for six months or anything like that. It will probably be a very straight forward loan, this is your rate and payment. Also, do not apply everywhere. That lowers your score too. Typically if you apply for the same type of credit within a short time frame(7-14 days can't remember which) it counts as one hit, so get your ducks in line before you start applying. Finally, DO NOT put the ring on that credit card that has an APR of 25% If you have the equity consolidate those credit cards and freeze them(literially in a bucket in the freezer) and make sure your mortgage isn't an ARM you won't be able to make the payments on when rates go back up. If it is, refinance or try to soon
- go to www.annualcreditreport.com and get a free credit report. See if there is anything you forgot or is causing trouble. The credit score will cost $8. It will tell you what the credit bureaus are telling the bank The best scores have credit that they aren't using
- The best way to get approved for loans and/or credit...increase your assets. Lenders will be more apt to loan you money if you have a reserve set up should anything happen and you need to pay things off. Make sure your previous bad debt is showing a zero balance as this could be affecting you. Also, depending on how much bad debt you had, it may take a while to rebuild. My advice as a credit counselor would be to save, save, save! Good luck and congratulations!
