If a home loan application is denied, first review the lender's decision letter to identify specific reasons, such as credit score issues, insufficient income, or documentation gaps. Correct errors on your credit report and consider improving your financial standing. If the denial was due to creditworthiness, dispute inaccuracies via the Fair Credit Reporting Act or boost your score by paying down debts and reducing credit utilization. If income is a factor, save for a larger down payment or seek a co-signer with strong credit. Reapply after addressing these issues, or explore alternative loans like FHA or VA mortgages with relaxed requirements.

Denial often stems from credit score flaws, with 62% of applicants rejected for scores below 620 (Federal Housing Finance Agency, 2023). Credit utilization exceeding 30% is another common issue, as lenders prefer lower ratios. For example, a 2022 FICO analysis found applicants with scores above 720 had a 92% approval rate, compared to 45% for scores below 580. Addressing these factors can significantly improve approval chances. Additionally, 38% of denied applicants resolved issues by obtaining a co-signer, per LendingTree data (2023), while FHA loans require only a 580+ score versus conventional loans' 620+ threshold. Proactive credit repair and strategic loan selection are critical to overcoming denial.