A credit denial can leave you with a useful document: an adverse action notice. If the decision involved a credit report, that notice identifies the reporting company and tells you about your right to a free copy. Start with the date on the notice, because the request window runs for 60 days from that date.
- Find the adverse action notice and note its date.
- Look for the main reasons for the decision, or instructions for requesting them.
- Check whether a credit reporting company is named and save its contact information.
- Request the report from the company named in the notice within 60 days.
- Review the report and dispute information you believe is inaccurate.
What a denial notice should tell you
A lender that denies a loan or line of credit application must give you the main reasons for the decision or tell you how to request those reasons. If the notice directs you to ask for them, you have 60 days to make that request. The Consumer Financial Protection Bureau explains that finding out why the application was denied is the first step.
When the decision was based on a credit report, the notice should identify the credit reporting company that supplied it, including the company's name, address and phone number. It should also explain your right to a free copy of that report. If a credit score was used in the decision, the notice should include the score and the key factors that affected it.
Read the reasons alongside the report information. A denial may involve income, existing debt or another part of an application, rather than an error in a report. A credit report and a credit score are different things: The report contains information about your credit history, while a score is a number based on credit information.
How to request the free report
The free-report right after a denial applies to the credit reporting company identified in the notice. Request that company's report within 60 days of the notice date. Keep the notice so you have the date and contact details in one place.
There is also a separate way to get free reports from the three nationwide credit reporting companies, Equifax, Experian and TransUnion. AnnualCreditReport.com is the authorized source for these reports. You can request one, two or all three at once. Federal law gives you the right to a free report from each company every 12 months.
You can also request reports by calling (877) 322-8228, or by mailing the Annual Credit Report Request form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The CFPB provides more information about requesting free credit reports, including availability in preferred languages.
The denial-related request and the regular free-report option are distinct. If the notice names one company, its report is the place to check the information used in that decision. Reports from the other companies can be useful for comparison, but they may not contain exactly the same information.
Check the report for information you do not recognize
Start with your personal information, then review the account list, balances, payment history and any public records. Look for an account you do not recognize, a payment shown as late that you believe was on time, or a balance that appears wrong. Compare the report with statements or other records you have kept.
An unfamiliar entry is worth investigating, but it does not automatically explain the denial. Compare what you find with the reasons in the notice. A report may contain accurate information that a lender considered, and correcting an error does not guarantee a different decision or a particular credit score.
Save a copy of the report with the denial notice. If you find a possible error, make a note of the reporting company, the account or entry involved, and what you believe should be corrected. That record can help you explain the issue consistently.
Dispute inaccurate information
You can dispute information you believe is inaccurate with the credit reporting company and with the company that supplied the information. For example, if an account shows a payment as late and your records indicate otherwise, identify the account and the payment in your dispute. Keep copies of your correspondence and any supporting documents.
The credit reporting company must investigate and correct errors it finds. If you still believe the report is wrong after the investigation, consult the CFPB's current dispute guidance for the available next steps. Keep the investigation response with your other records so you can see what was reviewed and what changed.
Watch for costly look-alike offers
Be cautious when searching online for a free report. Some sites offer a report only if you buy another service, while others may sign you up for charges you must cancel. Check the address carefully and use AnnualCreditReport.com or the phone number listed above for the authorized free-report request.
Some decisions can also involve specialty consumer reporting companies, which are separate from the three nationwide companies. These companies may maintain information about subjects such as tenant, insurance or check history. You generally request those reports from the individual company, and many provide them free. The company named in your notice is the starting point for the report used in your decision.
Please seek a professional. This article is general information, not financial, tax or insurance advice. Please seek a licensed financial, tax or insurance professional about your own situation.
