Let us face facts; money today is hard to come by. The Great Recession has robbed many of us of our financial security. If people with good credit cannot find money, how do you find it when you have bad credit? Loan rejection can be for many reasons. You need to understand which one(s) are affecting your loan application.

Bad Credit

You applied for a loan that was marketed as being for people with bad credit. You were rejected because of bad credit. How can this be possible? Just because a lender markets a loan as being for people with bad credit, they are not guaranteeing that everyone with bad credit will be approved. The loans are intended to relieve the financial strains for some people with bad credit.

It may not be your credit score that is stopping you from approval. It may be the reasons you offered up for why you needed the loan. You may not appear to be a suitable candidate for the loan you applied for. Did you state that your credit was poor because of a financial emergency that is temporarily preventing you from paying your regular bills? Did you tell them that when you were younger that you ran up your credit card debt before you even understood what credit card debt was? Have you been trying to dig out of that hole ever since? Lenders are willing to work with you if either of these scenarios is true for you.

However, if your financial problems show that you chronically late with your payments or have defaulted frequently, or if you have a credit report showing that lenders are always checking your credit score, you are not a top candidate for most banks. This type of history shows that you have exhibited a lack of financial responsibility and have become desperate for money. You will continue to be rejected if you have poor financial habits until you can demonstrate that you have changed and have begun working on repairing your credit damage.

No Credit

A lack of credit history demonstrates as much risk to a lender as does poor credit history. Without a credit history, lenders have no track record to use to determine if you will pay them back. If you have no credit history, you should take some steps to start one. You need to have a bank account. You also need a couple of credit cards that you use and pay off each month. There are not as many first-time credit card offers out there as there were before the Great Recession, but many department stores and supermarkets still offer them.

Lack of Collateral

There is an old adage that banks will only lend money to those who do not need it. This comes from the use of collateral to back a loan. Collateral is real property, such as a home or a vehicle. You pledge that property against the amount of the loan. In essence, you are showing the lender that you have property that could be sold to get you the money you want, you are simply choosing to borrow instead. With sufficient collateral, you can have a credit score of almost zero and still get approved. If you do not repay the loan, the lender will simply take your car or home as repayment.

No Income

Unemployment will not prevent you from getting an unemployment loan but those are special loans. Fast loans for people with bad credit are not unemployment loans. For a fast money loan you need to show to the lender that you have a means to pay back the loan and that requires a steady source of income. Another problem with income is that you must have enough to not only make your payments but you also need to have money left over to live off of.

You Have Options

If you have been rejected for a loan, you must understand that it is not the end of the world and that you have many options, including the ones listed above. You could find someone to cosign the loan with you. A cosigner with better income and better credit will help you qualify. A cosigner is a special form of collateral. The internet offers you a marketplace full of lenders. Shop around and you may find someone who will work with your specific circumstances.

Never give up. Keep in mind that if you have time before you absolutely need the loan that you can take that time to improve your credit and find the best lender for you.