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A good credit score alone does not mean a person will get the loan he wants. Lenders additionally look at the status of previous loans and the repayment history on such loans. A previously settled or a written off loan is likely to impair the ability to avail more loans. Credit history, outstanding loan value, loan types, recent credit events, etc. affect one's credit score.

Good Credit Score

A good credit score is necessary for successful processing of your loan or credit card application. It shows potential lenders that you are a reliable customer. But it does not necessarily mean that you are loan eligible. There are a few factors which might affect your credit card or loan application, despite having a good credit score.

The major reasons why your loan gets rejected even if you have a good credit score are:

  • Imbalance between income and expenditure: When you are requesting to borrow, your income matters a lot, because you must generally show some sort of ability to repay. So, the more your loan amount requirement, the more your income requirement. Even if you have a good credit score, your repayment capacity will be taken into account, and hence, having a good income becomes a vital factor.
  • Having too much of debt: Having too much of debt can negatively affect your credit worthiness, especially if you are applying for a mortgage. In this case, lenders look for existing debt obligations and they subtract it from your income. Having a high debt-income ratio might get your application rejected.

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Relation Between Credit Score Loan Eligibility - Customer Reviews

5 / 5 (3 Reviews)
31 Jul 2020

Credit Report Analysis,good app

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