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PSLOC Application Denied... What do I do?

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I applied to TD and Scotia for a PSLOC. I was rejected by both banks (without a co-signer). My credit score sits in the high 600s for Equifax, and low 700s for Transunion. They were primarily concerned by a few late payments (I missed 2 payments on my student line of credit, and 1 payment on my cell phone bill, all around the same time a little over a year ago).

They may have also been concerned with existing utilization of debt, as I do have OSAP debt, as well as a previous student line of credit.

What are my options at this point? I feel absolutely demoralized.. I was so close to going to law school, but now this pops up. I'm kicking myself for not paying those bills on time a year ago (financial difficulties made it hard to do so, but I should have made more of an effort to pay them), but there's nothing I can do now about them.

I don't really have anyone I can rely on as a strong co-signer/guarantor. One of my parents is able to co-sign, but she's had to take time off due to COVID and I doubt she makes enough to qualify so I'm not sure she'll be accepted as a strong enough co-signer. I need help/advice on what to do next.

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I’m in the exact same boat as you. Denied by both TD and Scotia. My credit score is also the same as yours, due to poor credit history from years ago. Any advice would be greatly appreciated. 

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I would recommend reaching out to the school you will be attending and see what they suggest. They'll have experience with this type of issue and can try to help you through it. 

Ultimately, you're best bet is likely going to be applying to all of the banks and seeing if you can get approved somewhere. Raise the possibility of applying for a lower credit limit and living frugally during law school, and see if you can get approved for that. 

If you aren't able to secure funding, consider applying for a deferral and spending the next year working towards improving your credit score and saving. Absolute worst case scenario, you're usually able to take one year off after 1L without question. If you really want to make it work and you're committed, you likely could do the following: 

  1. Defer for one year, work, and save as much as possible, but at least 1.5 x 1 year's tuition
  2. Complete 1L while working part time
  3. Take one year off, saving enough for another 1.5 x 1 year's tuition 
  4. Complete 2L while working part time
  5. Work 2L summer and complete 3L while working part time. 

Assuming you're able to save ~1.5x tuition during each of your working years, you should be able to make that work. But it's going to be a frugal five years.

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Posted (edited)

How long ago were the late payments? They're supposed to be wiped off a credit report after six years. Depending on how long ago they were, you could just run down the clock, work and save money, which will reduce your debt in the long term anyway, and then reapply to law school. But before considering that you should exhaust all your PSLOC options first.

Edited by harveyspecter993

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2 hours ago, BlockedQuebecois said:

I would recommend reaching out to the school you will be attending and see what they suggest. They'll have experience with this type of issue and can try to help you through it. 

Ultimately, you're best bet is likely going to be applying to all of the banks and seeing if you can get approved somewhere. Raise the possibility of applying for a lower credit limit and living frugally during law school, and see if you can get approved for that. 

If you aren't able to secure funding, consider applying for a deferral and spending the next year working towards improving your credit score and saving. Absolute worst case scenario, you're usually able to take one year off after 1L without question. If you really want to make it work and you're committed, you likely could do the following: 

  1. Defer for one year, work, and save as much as possible, but at least 1.5 x 1 year's tuition
  2. Complete 1L while working part time
  3. Take one year off, saving enough for another 1.5 x 1 year's tuition 
  4. Complete 2L while working part time
  5. Work 2L summer and complete 3L while working part time. 

Assuming you're able to save ~1.5x tuition during each of your working years, you should be able to make that work. But it's going to be a frugal five years.

Unfortunately, I already deferred for a year. I am 100% positive that given this, the school will not grant me another deferral.

How should I approach banks to ask them for a lower credit limit? I already asked TD & Scotia, but they said that any amount of credit would require a co-signer.

1 hour ago, harveyspecter993 said:

How long ago were the late payments? They're supposed to be wiped off a credit report after six years. Depending on how long ago they were, you could just run down the clock, work and save money, which will reduce your debt in the long term anyway, and then reapply to law school. But before considering that you should exhaust all your PSLOC options first.

They were a year ago, so I'd have to wait about ~5 years to get them wiped off my record.

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3 hours ago, crushing said:

I applied to TD and Scotia for a PSLOC. I was rejected by both banks (without a co-signer). My credit score sits in the high 600s for Equifax, and low 700s for Transunion. They were primarily concerned by a few late payments (I missed 2 payments on my student line of credit, and 1 payment on my cell phone bill, all around the same time a little over a year ago).

They may have also been concerned with existing utilization of debt, as I do have OSAP debt, as well as a previous student line of credit.

What are my options at this point? I feel absolutely demoralized.. I was so close to going to law school, but now this pops up. I'm kicking myself for not paying those bills on time a year ago (financial difficulties made it hard to do so, but I should have made more of an effort to pay them), but there's nothing I can do now about them.

I don't really have anyone I can rely on as a strong co-signer/guarantor. One of my parents is able to co-sign, but she's had to take time off due to COVID and I doubt she makes enough to qualify so I'm not sure she'll be accepted as a strong enough co-signer. I need help/advice on what to do next.

"One of my parents is able to co-sign, but she's had to take time off due to COVID and I doubt she makes enough to qualify so I'm not sure she'll be accepted as a strong enough co-signer. I need help/advice on what to do next."

Find out if the bank would accept your parent as co-signor first.

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Do you think you might be able to squeeze by in the first year, on your loans and bursaries alone? Perhaps putting another year of improving credit between you and your previous issues would improve your application for the following year.

I do realize that this would put you in a very difficult position next year, if you tried the above and then were still not approved for the LOC next year. But, if facing that situation, your school might allow you to pause your program for a year to earn more money beween 1L and 2L, which might be less stressful than having to relinquish your acceptance and wait another year. Or perhaps at the end of 1L you could transfer to a cheaper school than the one to which you've been admitted.

Also, I don't know what province you are in, but some provincial student aid programs allow you to request a higher loan limit due to specific circumstances. My partner was able to do that in our province; it may be worth a look!

-GM

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I would recommend reaching out to the bank that you and/or your family have the longest banking relationship with.

A lot of people don't realize that having a good, long relationship with your bank/banker can go a long way in situations like this. I can tell you I've been able to help people in similar situations that have a track record we can leverage, whereas John Doe or Jane Doe walking in off the street in the same situation doesn't have much a leg to stand on in most cases in situations like this.

When it comes to banking, as with almost anything in life, it's not always just about the cheapest bank accounts, credit cards, etc. A lot of people will jump from bank to bank for all these promos with accounts and credit cards they have, but staying and building a long term relationship can pay off when it you need it. The relationship between the bank and the customer can go a long way on both sides of the table when the situation arises.

Reach out to your bank, sit down and discuss your situation. Bankers are people, and want to help other people get to where they need to go. At least good bankers do, and I can tell you there are a lot of good ones out there.

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Hey OP,

Sorry to hear you’re going through this.  I know it’s a stressful process, but don’t give up and reach out to other banks (RBC, BMO, CIBC, etc.)  Getting declined once or twice doesn’t necessarily mean you’ll be unsuccessful elsewhere; there is an element of luck and arbitrariness when it comes to LOCs.  In the span of one month I had one bank reject me outright, another require a co-signor, and a third approve me for $125,000 without a co-signer.  In fact, the third advisor was bemused by how stressed out I was (I offered him a rather desperate-sounding letter regarding my circumstances lol) since he didn’t think there were any red flags in my application!  But here’s the thing—my current credit score is actually lower than yours and I also had some late payments on my report.  

Ask your school to recommend some bank reps who frequently deal with law students or work with an advisor who’s knowledgeable about PSLOCs because this can impact the outcome.  For example, my advisor recommended that I submit my confirmation of enrolment, instead of the initial letter of acceptance, as this would “strengthen” my overall application. 
You should also apply for provincial and federal funding (if you haven't already).  If you qualify for the maximum amount, I assume that should be enough to cover your tuition costs.  Good luck, OP!  

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