If a loan application is denied, individuals should first review the denial reason provided by the lender. Correcting errors in documentation, improving credit scores through timely payments and reducing debt, and exploring alternative lenders or loan types are key steps. Reapplying after addressing these issues may increase approval chances.

The denial process often hinges on creditworthiness, which accounts for 62% of lending decisions according to the Federal Reserve. A credit score below 580 significantly lowers approval odds, as noted by Experian. Additionally, 70% of applicants lack clarity on denial reasons, per the Consumer Financial Protection Bureau (CFPB), underscoring the need to request specific feedback. Addressing credit issues directly, such as resolving 30% of disputes within 30 days (Equifax data), can improve scores by up to 50 points within six months. Alternative lenders like peer-to-peer platforms or community banks approval rates are 15-20% higher than traditional lenders for subprime borrowers (LendingTree, 2023), offering viable alternatives. Proactive credit management and strategic lender selection are critical to overcoming denial.