A lot of borrowers don't realize how negative balances impact lenders more than one large loan, but I saw this frequently when I was a tax pro advising startup founder clients who were going through funding rounds. A small loan with two missed payments was more alarming to creditors than a larger loan with a cockroach credit history. Small repeated slips are viewed as a habit, not a situation in accounting; the same is observed in all industries too. What seems to hype them the most is the speed at which multiplying applications work against them since even three hard inquiries in a six-week time frame can drop a score by almost 25 points. Borrowers I've worked with who simply just paused for three months until they reapplied often had a higher approval rate and better terms.
In my experience, one common red flag people overlook is high credit utilization, even if payments are on time. I've seen applicants shave debt usage down below thirty percent, and suddenly lenders become much more receptive. If you're rejected, a short burst of balance paydown or cleaning up old accounts can open refinancing doors much faster than people expect.