A rejection is a diagnosis, not a verdict

Credit history problems

A credit bureau score is a summary, not a judgement — and banks read the detail underneath it differently from one another. A score of 690 is fatal at one lender and workable at another.

• Low credit score — the first job is finding out why. A score dragged down by one old dispute is a different case from one built on sustained late payment, and lenders treat them differently.
• Multiple enquiries — applying to several lenders in a short span marks the report and reads as desperation. The fix is to stop applying and place one properly prepared file instead.
• Fresh or thin credit file — no history is not the same as bad history, but automated scorecards often treat it that way. It usually calls for a co-applicant or a secured product.
• Regular DPD — days-past-due entries need explaining in the file rather than hoping the credit officer misses them.
• Written-off or settled accounts — the worst marker on a report, and the one most often left uncorrected after the borrower has actually paid. Getting the status updated is frequently the whole job.

Income documentation problems

Self-employed borrowers get declined far more often than salaried ones, and it is seldom because they earn less. It is because their income is harder for a scorecard to read.

• Fresh ITR — a return filed last week to support an application looks exactly like what it is. Timing and consistency matter.
• One year of vintage — most lenders want two to three years of business continuity. Some will take one. Knowing which is the difference between a sanction and a decline.
• New business setup — a genuinely new unit should usually be going to PMEGP or project finance, not to a standard business loan scorecard.
• Fresh GST registration — turnover with no filing history behind it needs corroborating from the banking side.
• Same-date ITR filing — three years of returns all filed on one day is the single most common self-inflicted rejection we see.

Banking conduct problems

Your bank statement is the most honest document in the file. Credit officers read it before they read anything else, because it cannot be dressed up after the fact.

• New bank account — six months of statements is a common minimum. A recently opened account leaves the assessor with nothing to assess.
• No current account — running a business through a savings account undermines the turnover you are claiming.
• Low banking — where declared turnover and credits into the account do not match, the declared figure loses credibility.
• Cash deposits — heavy cash is not disqualifying, but it has to be explained in a way that fits the nature of the trade.
• Cheque bouncing — regular returns are close to fatal on an unsecured file, and need a clean run before reapplying.

Property problems

On any secured loan the property is assessed as rigorously as the borrower. A perfect applicant with a defective title still gets declined.

• Low market value — the panel valuer’s figure, not the market’s, sets your loan amount. Different lenders use different panels, and the gap between them can be substantial.
• Unapproved and lal dora colonies — many lenders simply will not fund these. Some will. This is entirely a question of which bank.
• Vacant plots — usually funded at a much lower LTV than built property, if at all.
• Under-construction property — needs an approved plan and stage-wise disbursement, which changes the structure of the whole facility.
• Third-party security — pledging someone else’s property is possible but brings the owner into the file as a guarantor, with all the documentation that implies.

How we work a rejected case