 TITLE: What to Do If Your Loan Is Denied CONTENT: Building Your Credit Before Applying Again\n------------------------------------------\nWhile it's possible to get approved for a loan with less than stellar credit, you may be better off waiting so you can get better interest rates and save money.\nFor example, let's say you want to get a personal loan for $5,000. If you have fair credit, you might qualify for an interest rate of 25%, while someone with good credit might get an interest rate of 15%. Over three years, you'd pay $2,157 in interest, while they'd pay $1,240.\nIf you can wait until you can improve your credit scores before applying for the loan, it could save you on monthly payments and interest charges over the life of the loan.\nTo improve your credit, focus first on the reasons included in your declination letter. Take advantage of your free credit report and check to see if there's anything else you need to address.\nRegardless of the reason for your denial, focus on practicing good credit habits:\n*   **Make your monthly payments on time.** Your payment history is the most important factor in your credit score, and payments that are late 30 days or longer show up on your credit report.\n*   **Keep your credit card balances low.** Your credit utilization—your total credit card balances divided by their total credit limits—is another important factor in your credit score. If you have high balances, pay them down as quickly as possible, then keep them low going forward.\n*   **Avoid too many hard inquiries.** If your loan application was denied, it can be tempting to apply until you get approved. But while each hard inquiry doesn't have a big impact on your credit on its own, multiple in a short period can be a red flag for lenders.\n*   **Check your credit reports.** Review your credit reports regularly to make sure they are accurate. Get your free credit report from Experian here.\nImproving your credit can take time. But if you do it right, you could save hundreds of dollars or more the next time you apply for a loan. END