When Can You Reapply for a Loan With a Credit Union?
When a credit union declines your application for a loan, you can resubmit a new loan application at any time. However, lenders including credit unions must provide you with an adverse action notice whenever you are turned down for a loan. You should consider the reason for the declination before deciding when and whether you should reapply for the loan.
Other People Are Reading
-
Membership
-
Credit unions are member owned and operated. Every credit union has strict rules pertaining to membership requirements. Some credit unions only allow people who live in a particular town to become members while other credit unions only serve people who are members of the armed forces or people who work for certain companies. If a credit union turned down your loan application because you were ineligible to become a member, then unless you have suddenly become eligible to join that union, you cannot reapply for the loan.
Special Circumstances
-
In some circumstances, the credit union loan officer can best advise you as to when you should reapply for a loan. Many credit unions do not allow you to refinance your home until you have held your current mortgage for at least 12 months. In a situation such as this, your loan officer can tell you precisely when to reapply for your loan. If you lack sufficient income to qualify for a loan but anticipate a future pay raise, ask your lender how long you should wait after your pay raise comes into effect before reapplying for the loan.
-
Bad Credit
-
Most creditors make monthly reports to the credit bureaus, and your credit score only changes when the credit bureaus receive information that necessitates a change in your score. When you apply for credit, your credit score temporarily drops by a few points and frequent credit applications cause your score to drop significantly. Therefore, if you are declined for a loan on the basis of your credit score, do not reapply for that loan until you have taken steps to improve your score, such as settling unpaid debts. Reapplying without taking steps to improve your score actually makes the situation even worse.
Credit Errors
-
In some instances, credit bureaus receive inaccurate information from creditors that causes someone's credit score to drop. If you were declined for a loan due to inaccurate information on your credit report, you can contact the credit bureau and request to have your credit file corrected. You must provide the credit bureau with some kind of supporting documentation to prove your case. Legally, the credit bureaus have 30 days to review your request. Therefore, wait for a few months before reapplying for your credit union loan to allow time for corrections to take effect.
-
