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The bank turned me down for a $10,000 unsecured loan saying I had too much unsecured debt and no collateral (isn't my word good enough?)

 

Here's why I'm pissed: my credit score is 636 after paying off all but one of my credit cards and only ever making one late payment. I only owe $3000 total, down from $11,000.

 

I've gotten two cards through my bank, both have $0 balances and were never later. I've been a customer with them for years.

 

I make $60,000 a year, +%25 profits - I only wanted the money for 24 months.

 

So now I don't know what to do. We just hired a new person so the company is making like no money - I'm going out next week to try and get some more customers signed up, but realistically I'm not going to signup $10,000 worth of customers in a couple weeks, and I couldn't use all that money if I did.

 

Any ideas? Or places I would have a better shot of getting a loan at?

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With all the issues with Bank's today, I don't think you'll find a loan with under a 720-750 credit score.

 

So is your question how to raise your credit score?

 

Being on time with your payments is only a small factor.  Other things that will help you is:

 

Apply for new credit cards, this will bump up your total available credit line.

 

Everytime you apply for a loan, your credit gets dinged.  It reflects that you tried to get credit and didn't.

 

Having $3,000 of unsecured debt, and if you have little credit history, is a lot for a bank if you don't own anything.

What about a co-signer? A friend? Family member? Business partner?

I got my parents to co-sign a loan for school with me and they have a terrible financial background. You make more than both of them put together and I managed to get $5000 (what I was asking) and they said I could have gotten $15000. I already have a $2400 or so car loan and my parents have a $90,000+ mortgage and a car loan for my dad's truck. Maybe the truck, car and house were collateral and that might have helped. But I do think having more than one name on the bill looks better to a bank. Not certain though.

 

You could always take up poker :P

I'm not surprised the bank turned you down. With no collateral there is absolutely no reason for them to give you a loan. The entire economic recession in the U.S. was created by banks pumping out money for poor mortages/loans that they couldn't get back. In the recent months, banks have whiped their protocool on loans a threshold higher. Banks who haven't bankrupted yet, can't take any risk.

Wow... I actually have to agree with TFG here.  Insane.

 

But yeah, with a credit score of only 636 and not actually owning anything, you don't have a solid backing for loans.  They have really cracked down recently.  Hell, I have a house, 2 cars, a credit score above 770 and I would be surprised if they let me refinance my house right now (mainly due to the fact that because the housing market SUCKS, I know owe more on my house than it is worth... but that is besides the point).

 

Sometimes you have to go into debt to build credit and make the banks trust you.  Buy a house, a car... something that you can "own" even if you will be paying on it for years.  You have to build equity in something.

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