Credit Reporting Agencies

• Your loan application was most likely denied because of your credit rating. Consumer credit files are compiled by the three major credit reporting agencies -- TransUnion, Experian and Equifax. You are entitled to receive one free copy of your consumer credit file through the AnnualCreditReport website. In general, consumer credit scores are only available for purchase through the consumer reporting agencies.
  
  

Inquiries in a Credit File

• If you were shopping around for other loans at the time your application was denied, your credit rating may have experienced a slight drop because every time a bank or credit card company requests a copy of your credit file, the inquiry is documented by the credit agencies. Receiving a high number of inquiries on your credit file in a short period of time hurts your credit rating. Inquiries remain in your credit file for 24 months. However, after 12 months, they don't impact your credit rating anymore.
  
  

Considerations

• Being denied for a loan does not in itself hurt your credit rating. The way your credit file is compiled, potential lenders see only that a creditor requested a copy of your credit file within the last 24 months. The bank might reasonably assume a credit application was made through the creditor, but denied for credit. Your credit rating will not drop based solely on the denial of your credit application.
  
  

Improving Your Credit Rating

• You might want to improve your credit rating before applying for another loan. Financial expert Suze Orman suggests lowering each credit card balance to within 30 percent of your credit limit. Generally speaking, you want to pay off the credit card with the highest interest rate first, and then the rest in descending order. Make sure you meet all your financial obligations or your credit rating will drop.