Got Denied PenFed personal loan……..I need some advice

[svali42]

I started my Credit journey June, 2021 with an average score of 580 to its current score of low to mid 700s (T.U, Experian & EQUIFAX). 

I am a PenFed customer so I thought I'd give a shot on a personal loan. Honestly, I thought I would be approved because of the 700s credit scores, current salary ($175,000), and no loans apart from Student loan.  

I applied and got rejected because of the following reasons that they stated: 

1. Debt Deliquency. A few years ago I owed $5000 to Santander from an auto loan. Got into an accident while in college, couldn't work because of the injuries; however, right after finishing school we came to an agreement of $3200 and they closed the loan. No other delinquencies. 

2. Length of time accounts established. 

3. Too many inquiries past 12 months. This is true since I opened two secured credit cards and a secure PenFed loan to build my credit. Then when scores improved.....I got unsecured credit cards with Apple, Amex gold & Platinum. 

4. Too many accounts with balance. This I didnt  understand since all of my credit cards are within 6% -9% credit utilization. 

Is there anything I can do to improve my credit life and/or the above situation? 

Any tips are greatly appreciated

[SouthJamaica]

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@svali42 wrote:

I started my Credit journey June, 2021 with an average score of 580 to its current score of low to mid 700s (T.U, Experian & EQUIFAX). 

I am a PenFed customer so I thought I'd give a shot on a personal loan. Honestly, I thought I would be approved because of the 700s credit scores, current salary ($175,000), and no loans apart from Student loan.  

I applied and got rejected because of the following reasons that they stated: 

1. Debt Deliquency. A few years ago I owed $5000 to Santander from an auto loan. Got into an accident while in college, couldn't work because of the injuries; however, right after finishing school we came to an agreement of $3200 and they closed the loan. No other delinquencies. 

2. Length of time accounts established. 

3. Too many inquiries past 12 months. This is true since I opened two secured credit cards and a secure PenFed loan to build my credit. Then when scores improved.....I got unsecured credit cards with Apple, Amex gold & Platinum. 

4. Too many accounts with balance. This I didnt  understand since all of my credit cards are within 6% -9% credit utilization. 

Is there anything I can do to improve my credit life and/or the above situation? 

Any tips are greatly appreciated

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Yes.

1.  It improves your score to have most of your revolving accounts report zero balances.  So pay some or even most of your revolving accounts before the statement cuts.

2.  Don't apply for any new credit, or for anything that could trigger a hard pull, for at least 6 months.

3.  See if you can negotiate a good will deletion with Santander.

[svali42]

@SouthJamaica Thanks for the advice

[svali42]

@SouthJamaica @Just called Santander bank and they told me they can't do anything because the report reads the account is closed and balance is $0

[TryItAgain]

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@svali42 wrote:

I started my Credit journey June, 2021 with an average score of 580 to its current score of low to mid 700s (T.U, Experian & EQUIFAX). 

I am a PenFed customer so I thought I'd give a shot on a personal loan. Honestly, I thought I would be approved because of the 700s credit scores, current salary ($175,000), and no loans apart from Student loan.  

I applied and got rejected because of the following reasons that they stated: 

1. Debt Deliquency. A few years ago I owed $5000 to Santander from an auto loan. Got into an accident while in college, couldn't work because of the injuries; however, right after finishing school we came to an agreement of $3200 and they closed the loan. No other delinquencies. 

2. Length of time accounts established. 

3. Too many inquiries past 12 months. This is true since I opened two secured credit cards and a secure PenFed loan to build my credit. Then when scores improved.....I got unsecured credit cards with Apple, Amex gold & Platinum. 

4. Too many accounts with balance. This I didnt  understand since all of my credit cards are within 6% -9% credit utilization. 

Is there anything I can do to improve my credit life and/or the above situation? 

Any tips are greatly appreciated

---

Try Lending Club. I had a similar credit score start as you, now mid 700s, and from 600 I have received and paid off maybe 7 loans through LC 15k to 50k.

As long as you don't have like 75%+ overall utilization which it seems you don't, you should get an offer. Good thing is they are 100% Soft Pull unless you accept a final loan, they will Hard Pull AFTER you receive funds.

Due to Santander situation, do not expect the best terms, but as long as you can prove your stated income I'd be stunned if no offer was given. Ask for as much as 50k, as they will counter and usually offer 3 or 5 year options. With POI and auto pay acceptance, you usually have funds in days.

Pull that off then in future, PenFed wont give you any issues, YMMV here, but that's how it worked for me.

Prosper can work too but lately can be more picky, plus while SP initially, they will HP upon acceptance but before final approval, unlike LC.  Between the 2 I've done 15 loans since 2014.

Hope that helps, Good luck!