Overview

Even after receiving a rate offer, your loan is still subject to final approval. Certain financial changes—known as subsequent disqualifying events—can impact your ability to secure funding. Understanding these factors can help you avoid being declined before loan origination.

What Are Subsequent Disqualifying Events?

A subsequent disqualifying event (SDE) occurs when there are significant changes to your credit profile between the time your loan offer is made and when the hard credit inquiry is conducted. SDEs are determined by the lender and are not always the same between lending partners with the Upstart platform.  In general, if any of the following events occur, your application may be declined:

✔ Credit Score Drop

• If your qualifying credit score decreases by more than 25 points from the score used to determine your loan offer, or falls below the required threshold.

✔ Increase in Debt Obligations

• If your monthly debt obligations increase by more than 3% of your monthly income or by at least $200, and these new obligations were not disclosed at the time of application.

✔ New Credit Inquiries or Accounts

• If new credit inquiries or accounts appear on your credit report after your loan offer, your application may be subject to review or disqualification. (This excludes inquiries related to student loans, vehicle loans, or mortgages.)

How to Avoid Subsequent Disqualifying Events

To ensure your loan remains approved, take these precautions:

• Avoid Applying for New Credit – Refrain from opening new credit cards or taking out additional loans until your loan is funded.
• Make On-Time Payments – Continue paying all existing credit obligations on time to prevent late payments from affecting your credit score.
• Monitor Your Credit Report – Regularly check your credit report for unexpected changes or errors.
• Keep Debt Levels Stable – Avoid large purchases or taking on significant new debt before loan funding.

Next Steps If You Are Disqualified

If your loan application is disqualified due to an SDE, you will receive a notification explaining the reason. You may:

• Review Your Adverse Action Notice for details on the disqualification.
• Improve Your Credit & Financial Profile and reapply after the required waiting period.
• Check Your Credit Report to ensure all reported information is accurate.

📌 Related Articles:

• Why Your Loan May Not Have Been Approved
• How to Improve Your Credit Score
• What Is a Debt-to-Income Ratio and Why Does It Matter?