Need a Loan But Keep Getting Declined? What to Do Next

| Read Time: 6 minutes
Share This Post

If you’ve recently been declined for a loan , you may be tempted to keep applying in the hopes that you will eventually get accepted. While this may sound like a logical approach to handling things, it isn’t the way you want to go with a loan. In fact, you may actually be making things worse for yourself by repeatedly applying. So, what are you supposed to do? You’re in the right place, as we’re going to guide you through the best course of action for proceeding after a declined loan application.

First of All, Take It Easy

You’ve been denied and are ready to try your hand at it again. But before you do something rash, consider this: every time you apply for a loan, a hard check is being made against your account to determine your credit status. Each time this happens, your score could drop by as much as 10 points. As such, you want to apply when you know it’s safe to do so. If you were declined, it was likely because of something that you can fix over time. Constantly applying can make you look like a risky borrower. The lender is less likely to want to take a chance on you if it appears that you are desperate for a loan. Someone who is willing to do anything to get their hands on a loan may be much less likely to pay it back. Obviously, this isn’t the case for everyone and there are unique individuals out there who would pay it back on time and as promised. But lenders know that, for the most part, it’s best to avoid desperate borrowers.

A Better Approach

If you really need to borrow money, you should wisely search out the best way to get approved. This will bode well not just for you, but your credit score, as well. Try your best to avoid lenders at all costs. But unless you need money in a hurry (like for an emergency), a lender may be your only viable option. If, however, you don’t necessarily need money right away, you may find that you have more options available to you. Having a wider variety of resources to choose from is one thing. You should also be working to increase your personal chances of getting approved for a loan. This starts and stops with your credit score. Sure, there are other factors that can affect the outcome of your loan application. But by and large, lenders are interested in your credit history . This tells them how trustworthy you are for paying back a loan. There are, of course, those who have lower credit scores who are more trustworthy than those with higher scores. But it’s a baseline for lenders to go by, so you’ll just have to follow it for the time being. If you want to be sure that you won’t be overlooked when applying for a loan, fight to get your credit score in a better place.

Your Credit Score

You probably have a pretty good idea of what your credit score is. If not, you may have a ballpark of where you stand. This is going to help you in determining the best course of action for getting approved for a loan and who to choose for financial support. It’s best to just assume you don’t know what your score is and check it again. This will ensure that you have a current and reliable score on which to base your search. After you have established your credit score, it’s time to compile your work history. This should be steady, as lenders want to know that even if something unforeseen happens with your current job, it won’t be long before you find employment again. For many people, irregular employment history hurts them in getting approved for a loan. What’s more, if you just started a new job, it could hurt your chances of getting approved. You certainly have some groundwork to take care of before you proceed with another loan application. If you can polish up either your work history or credit score, you will have a much better chance of getting approved.

What Kind of Credit Score Do You Need?

Credit scores range from anything between 300 and 850, on average. The lower your credit score is, the less likely you will be to get the loan you need. When comparing common FICO scores , it’s easy to tell where you want to be. Let’s take a moment to observe what these scores mean for you.

  • 300 – 579: Very poor
  • 580 – 669: Fair
  • 670 – 739: Good
  • 740 – 799: Very good
  • 800+: Excellent

While it’s true that bad credit can make life quite trying at times, it doesn’t necessarily mean that it’s impossible to get a loan. Knowing why your credit is bad is the first step in determining what kind of options you have. Most people know if they have bad credit. From there, though, it’s possible to keep track of your score so you can work toward improving it. In the meantime, however, it’s important to weigh your options. You might be better off going with a personal installment loan or even a mortgage loan if that pertains to you. You may also want to look into one of the following:

Many of these lenders specialize in helping people with bad credit to secure loans. Knowing why your credit is bad and having a willingness to improve it will go a long way in your quest of getting a loan. What’s more, you may want to stick with lenders that don’t perform credit checks. If you’re trying to fix your bad credit, the last thing you want is credit checks taking a bite out of your score. It’s important to understand that if credit checks aren’t part of the approval process, you’re going to need to have a job that pays at least “X” amount of money every month (depending on how much you’re trying to borrow). This gives the lender some security that you can make your repayments on time. You will want to research each lender’s terms beforehand to ensure that you can meet their requirements. Once you have narrowed down the most suitable choices, you can proceed with the application process. Be mindful that this can take time. Some lenders may take longer than others, but it’s important to remain patient. Depending on who you chose to get your loan through, you may have to settle for a loan that is less than ideal.

Avoiding Small Loans

If you require a larger loan and your credit score is low, there isn’t a whole lot that you can do in the here and now. Bad credit will often equate to lowball loans, which may or may not be enough to take care of your needs. In order to avoid these minuscule loans, you’re going to have to get serious about your credit score. Improving your score will increase your chances of getting the loan you need. Furthermore, it will broaden your lender options. When you have good credit, you can look forward to more resources to choose from. What’s more, you can often avoid higher interest rates on your loans. When people default on their agreed-to repayments, many times it’s because the interest rates tack on more than what the borrower can reasonably afford. You can avoid falling into this trap by taking the time to improve your credit before attempting to secure a loan. It will likely take some time, but the benefits of doing so are well worth it in the end. That hard work will pay off in the form of affordable interest rates, higher loans, and a wider range of options for you to compare.


If you’re a small business owner or an aspiring one, a small business loan or even a personal loan you take out to start that small business can make all the difference in your life. Some established business owners need to take out a loan to help repair their store or invest in new equipment. If production equipment breaks down, some businesses can’t stay open until that equipment is replaced or fixed. This is where fast loans are a necessity. To ensure that you don’t get caught up in a situation where you can’t get a fast loan to make repairs, continually work on improving your credit score. This could make the difference between you keeping your doors open and closing them for good. Also, always remember to compare all of your lender options. No matter how enticing one loan sounds, there might be an even better one out there. If you would like more information on how you can improve your chances of getting a loan , we encourage you to check out our helpful articles . There, you will find a wealth of tips for improving your business that is sure to come in handy. Sources

Did You Know?
We've funded over $400 million for small business owners since 2015