After a mortgage lender denies your application, follow these steps: First, request a written explanation and a copy of your credit report. The Equal Credit Opportunity Act mandates lenders provide denial reasons, often related to credit score, income, debt-to-income ratio, or property issues. Review the credit report for errors using tools like and dispute inaccuracies with the credit bureaus. If the denial was due to a low credit score, consider credit repair strategies such as paying down credit utilization, resolving collections, or securing a credit-builder loan. If income is the issue, document additional earnings or explore loans with lower income requirements, such as FHA or VA loans. If the property lacks insurance or meets other standards, work with a real estate agent or inspector to address deficiencies. Consult a housing counselor or attorney to navigate complex cases, including potential discrimination or procedural errors.

The denial process often stems from systemic barriers or individual financial constraints. Data from the Consumer Financial Protection Bureau (CFPB) reveals that 20% of mortgage applicants were denied in 2022, with credit score inaccuracies and documentation gaps as leading factors. A 2023 Urban Institute study found that 35% of denied applicants could have qualified with minor credit score improvements. For instance, FHA loans require a minimum 580 credit score, while conventional loans typically demand 620–680. Improving a score by 50–100 points can increase approval chances, as seen in FICO score analysis by Experian. Additionally, the CFPB reports that 25% of consumers have credit report errors, which can lower scores by 50–125 points. Addressing these issues systematically raises approval rates by 15–30%, per data from LendingTree. Alternative loans like VA or USDA programs, which offer relaxed criteria, approval rates reach 60–70% for eligible applicants, per statistics. Proactive credit repair and exploring alternative lenders significantly mitigate denial impacts, ensuring equitable access to homeownership.