What To Do If Your Affirm Loan Gets Approved Then Denied

Learning your Affirm loan was approved only to later be denied can be confusing and frustrating This unfortunate situation happens more often than people realize. Don’t panic – there are steps you can take to get back on track for approval

This article explains common reasons for an Affirm approval being revoked, what the denial process entails and most importantly how to rectify the issues so you can successfully get the financing you need.

Why Would My Affirm Loan First Get Approved?

Affirm approves loans using an instant automated system. When you apply software checks your credit profile against predetermined approval criteria. If everything looks good, you get a fast tentative approval.

This initial okay is contingent on passing Affirm’s full underwriting process. The computer models can miss things a human auditor would catch. Approval isn’t guaranteed until underwriting completes its verification.

It’s easy to assume initial approval means you’re all set. But take it as a positive sign still pending final confirmation. Don’t make purchases relying solely on the preliminary green light.

What Triggers an Affirm Approval to Switch to Denied?

Many factors could cause Affirm to overturn their initial loan approval:

• Credit history inaccuracies – If new activity doesn’t match your credit reports, this raises red flags. For example, a recent missed payment you knew nothing about.

• Verification failures – Employment, income, or identity confirmation falls through, making you ineligible.

• Fraud suspicions – Large recent credit lines, address changes, or other data points may indicate fraud to them.

• Affordability concerns – A deeper debt-to-income analysis could determine the loan is too risky.

• Business policy changes – New internal risk models might flag you when old ones didn’t.

• Multiple applications – Applying for other loans diminishes your creditworthiness.

• Alternate information – Data from other sources contradicts your application details.

The key is not to take initial approval as a guarantee. Be prepared for potential denial and don’t overextend until underwriting completes.

What Does the Affirm Denial Process Look Like?

Here are the typical steps once Affirm decides on denial after previously approving:

• Adverse action notice – You receive a written notice explaining denial reasons per the Fair Credit Reporting Act.

• Loan cancellation – Any loan documents or temporary account is revoked. The loan is closed.

• Seller notification – Affirm informs the merchant you no longer have financing through them.

• Credit reporting – The denied application must be reported to credit bureaus as adverse action.

• Appeal instructions – The denial letter explains how you can dispute the decision if appropriate.

• Alternative financing – Affirm may suggest trying again with a co-signer or different loan product.

The process aims to be compliant, transparent, and give you recourse options. Don’t immediately jump to anger or assumptions. Work to understand what went wrong so you can address it.

Reasons Affirm Could Deny Your Loan After Approval

Affirm’s denial letter will cite the specific reasons your loan got rejected. But common grounds for reversal include:

1. Insufficient Income

Underwriters take a closer look at your income sources, employment history, and earning trends before finalizing approval. If they find your actual income is too low to support repayment, denial could result.

2. High Debt-to-Income Ratio

How much existing debt you have relative to income is reconsidered. Too high a ratio makes the new loan seem too risky.

3. Low Credit Score

Your actual FICO scores retrieved later may not meet lending requirements if they differ from your estimates.

4. Errors on Credit Reports

If new negative information like late payments surfaces on your credit file, you become less attractive as a borrower.

5. Unable to Verify Information

If Affirm cannot confirm your employment, income, ID, or other details, they cannot establish loan eligibility.

6. Pending Changes

Major upcoming events like a job loss or move can make near-term repayment ability questionable.

7. Fraud Concerns

Unusual recent credit activity may mean stolen identity or a manufactured credit profile.

I Was Already Charged for My Purchase. Now What?

Being charged for an order tied to Affirm financing that later got revoked is understandably troubling. But don’t panic. Here are some potential scenarios:

• The charge will be reversed automatically once Affirm cancels the loan.

• The merchant will place a temporary authorization hold until your new payment method is sorted.

• You will have to contact the seller directly to explain the financing fell through and arrange to pay via different means.

• Affirm or the merchant will work with you on a payment plan for the purchase.

• You can return the items purchased if possible.

Communicate promptly with all involved parties so they can start resolving the payment problem. Keep pressing for acceptable solutions until you get a resolution.

How to Get Approved if Denied After Affirm Preapproval

If Affirm denied your loan, take steps like these to strengthen your case and get approved on reapplication:

• Pay down debts – Improving your debt-to-income ratio improves eligibility.

• Increase income – Take on a side gig to boost earnings if they were deemed insufficient.

• Fix credit report errors – Resolve any mistakes dragging down your score.

• Add a co-signer – Their income and credit can offset your weaknesses as the primary borrower.

• Explain circumstances – If red flags like job loss aren’t going to affect your ability to repay, clarify this to Affirm.

• Provide documentation – Give updated bank statements, employment verification, etc. to resolve data issues.

• Meet credit building goals – Before reapplying, work on improving your credit profile.

With some time and effort, you can become eligible for the Affirm approval that initially slipped away unexpectedly.

Tips to Avoid an Approval Being Revoked

To reduce chances of initially getting approved for an Affirm loan only to have it later denied, do the following:

• Only apply for loans you’re confident you can repay – don’t overextend.

• Be truthful on applications and don’t exaggerate income or credit health.

• Avoid applying for multiple other loans around the same timeframe.

• Maintain your normal spending levels after approval to avoid red flags.

• Notify Affirm promptly of any changes in employment, income, or address.

• Review credit reports beforehand so you know your real scores.

• Read all terms to understand they reserve right to deny after approval.

• Wait until underwriting finishes before completing purchases tied to the loan.

Does Getting Denied After Approval Hurt Your Credit?

Unfortunately, yes – an approval reversal results in a hard inquiry and denied application on your credit history. But the damage is usually minor (under 10 points) and temporary.

Continuing to manage credit responsibly going forward will overcome this. An approval take-back is disappointing but not the end of the world. Learn from it.

Can I Appeal If My Affirm Approval Gets Reversed?

The Affirm denial letter includes instructions for disputing the rejection if you believe there are extenuating circumstances or data inaccuracies at play.

File a written appeal by the deadline and provide supporting documents to back up your case. Success rates for overturned decisions are low, however. The denial usually stands except for clear mistakes.

What Are My Alternatives If Denied by Affirm?

Even if Affirm rejects you, other financing options exist including:

• Retail credit cards – Store cards often have lower approval requirements.

• Secured loan – Backed by a savings deposit so less risky for lenders.

• PayPal Credit – Simple application and instant decision.

• Credit union loan – May offer more flexibility than big banks.

• 401(k) or pension loan – Borrow against your own savings.

• Loan co-signer – Partner’s income strengthens the application.

• Buy now, pay later – Plans from QuadPay, Klarna, etc. divide payments.

• Peer-to-peer lending – Borrow from an individual rather than institution.

• Credit counseling – Non-profit experts help craft financing strategies.

Don’t let an Affirm surprise denial derail your plans. With a mix of perseverance, problem-solving, and readiness to try alternatives, you can get the loan or line of credit you need. The path just comes with some unexpected twists sometimes!

What to Do If Your Affirm Loan Is Mysteriously Denied

Learning Affirm initially approved your loan only to reverse course and deny it can certainly be confusing! But denial reasons fall into a few main categories like income, existing debts, credit scores, or fraud suspicion.

If you receive an out-of-the-blue denial on an Affirm loan you thought was locked in:

• Review the adverse action notice closely to understand the lender’s reasoning.