Credit Denied? Here are 5 Reasons That May Prevent Credit Approval

Posted by Sam Stone

When deciding whether you should lease or purchase your next office copier, don’t be caught off guard by the credit department.

Application with Rejection Stamp

1) Negative Payment History

If your business has a negative repayment experience, such as multiple instances of late payments, a default, or a write-off, we may not be able to reach approval.

2) Recent History of Bankruptcy, Collections, Liens, or Judgement

A recent bankruptcy may prevent you from being credit approved. Other derogatory collections or public records, such as liens or judgments, may hurt your ability to qualify for credit.

3) History of Lease Write-Offs

If you’ve had recent or multiple instances of lease write-offs, the likelihood of credit approval will decrease.

4) Slow Payments on Open Trades or Leases

When other lenders report to credit bureaus that your business does not make timely payments, this is a warning sign. It may be a sign you are unable or unwilling to satisfy current debt obligations.

5) Recently Opened Accounts or Large Balances

If your business recently opened multiple new accounts or is carrying a larger debt balance than usual, this can sometimes suggest you are overextended.

We also know, “stuff” happens and life can be complicated

While we can’t approve every customer, we do our best to look at the whole picture before making a decision. If declined, you can ask for the reasons for the credit decision. In a case in which your business has minimal credit reporting, there are a few steps we can take to mitigate the risk of no business credit to make an approval. If there are any unusual circumstances, it never hurts to provide any extra context you possess.

Information supplied by GreatAmerica Leasing, a Stone’s Leasing Partner.