Understand credit denials
If you are denied credit – and more than one-quarter of all mortgage applications are denied – it’s important to get information on the situation so you can improve your standing and avoid the problem in the future.
You also can make sure an identity thief has not hijacked your credit record.
Borrowers have a legal right to know why their credit request was denied. Be sure to ask.
Common reasons for denying credit include a low credit score, too much or too little debt (the latter making it hard to judge creditworthiness), a short job history and an income level that is below the lender’s standards.
Look for errors in your credit report, and work on the areas where lenders find you lacking, so that your next application is more likely to go through.
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Liquidity
When an asset can be bought or sold quickly and in large amounts without affecting its share price, it is said to be “liquid.” As a result, the stocks of giant companies, such as General Motors, as well as government bonds are considered liquid investments. These securities are actively traded, and their share prices will not move wildly based on a few buy or sell orders.
By comparison, stocks and bonds in tiny companies or issued by unstable foreign governments would be considered illiquid because a few orders can make their prices swing drastically.
Liquidity also applies to the ability to convert assets into cash. Bank accounts with check-writing privileges, therefore, provide instant liquidity because you can access your money at any time. Accounts that have a time lag before money can be accessed are considered less liquid.
