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Asset Based Loan

Too many accounts recently established – Declined

Among the decline reasons that seem difficult to accept, understand, and even have enough information on to figure out how to handle in the future, “too many accounts recently established”, or similar language, is one reason that leaves declined applicants at a loss.

This is a decline reason often assigned to applicants that have recently opened credit accounts of some type.   The lenders review the number of accounts recently opened, how long ago they were opened, the type of account opened, and possibly the limits.   There are very likely other factors as well they do not disclose.

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The lender believes the applicant has established or opened too many accounts too recently which they are not comfortable with.    They consider this type of activity and behavior by an applicant to be an elevated risk factor, and will often decline an applicant for this.

Whether this is a reason the applicant can accept or not, the bigger hurdle for a declined applicant is they do not know and will not be informed of exactly how many accounts are “too many accounts” , and in what span of time are they “…recently established”.

If the applicant calls the lender and speaks with a representative, they can be sure the representative does not know, will not be told, and will be unable to find out the answers to these very valid questions the declined applicant will have and deserves to know.   After all, if an applicant is told they are declined for certain specifications, aren’t they entitled to know what the parameters of the specifications are?

Certainly they are, however, they will not be able to find this information out, they will have to alter their behavior based on generalities.   All the declined applicant knows is they need to make sure they don’t apply for, or establish too many accounts too often.    Does that mean 3 accounts, 5 accounts or 10 accounts?    Does it mean in the last 3 months, 4 months, or 5 months?  Declined applicants will be forced to simply refrain from heightened activity as best they can.

This type of decline reason is common to many larger lending institutions and is not an aberration, so there are many applicants that are frequently declined for this reason.     The reason applicants will not be told the specifications is that it is considered proprietary lending guideline criteria by the lender, which they consider company secrets.    While this assertion can be disputed since applicants are directly affected by the criteria, applicants will probably get better results by simply making sound conservative judgements about how often they establish new accounts.

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