A loan rejection is not necessarily final, but it is up to you to do what is necessary to convert the transaction to one that meets underwriting requirements. This series provides three reasons for failure to be approved and their solutions. No. 1. Credit score too low. “Dings” on your credit report lower your score. It takes time for adverse matters to drop off your report and raise your score, but there are some exceptions. One is where the score is depressed by a reporting mistake, which is not uncommon. As soon as the mistake is corrected, your score will increase. Another possible way is to pay down high balances on your credit cards. A high ratio of balance to maximum balance, called the “utilization ratio,” is considered a sign of credit weakness, reducing your score. Paying down balances to less than 50% of the maximums should raise your score. Next in Part 2: Debt/Income Ratio.
