Rejected for Credit? Take These 5 Simple Steps
You may have received a letter telling you that you have been denied credit. Most people throw these letters away without a second look. Don't be so quick to discard these letter. They contain important information that you should review and save as part of your permanent credit file.Federal Law and Credit Denials
Two federal laws require that creditors send these letters out when you are denied credit, the Fair Credit Reporting Act and the Equal Credit Opportunity Act. The notice should include a description of the action taken on your credit application and two key pieces of information. First, the notice should include either the reasons why you were denied credit, or a statement that you are entitled ask for those reasons by writing away for them.
Second, the notice will identity any credit bureau that provided information used by the creditor to deny you credit. The significance of this statement is that you are entitled to a free copy of any credit report from the agency whose report was used by the creditor.
For people who watch their credit and attorneys who represent victims of credit reporting errors, these letters provide an important window into the consumer's credit. For people with good credit, there is no good reason for a credit denial, so a letter denying credit can be a warning sign that something is wrong with the report or that a bill has landed on the report that the consumer did not know about.
Because these letters provide for the reasons underlying a credit denial, these letters can reveal specific problems or errors with a credit history that would otherwise go undiscovered. For example, a person with a good credit history should never be denied credit for a judgment on their credit report. If a creditor denies you credit based on a collection judgment, and you are unaware of any court cases filed against you, this is sign that your credit needs urgent attention.
Finally, these letters can also help to understand if a merchant was being honest while negotiating your purchase. May credit denials arise out of credit transactions with local merchants who offer on-site financing through banks or finance companies. If the merchant has told you that you have been approved for credit, but you begin to see denial letters, this is a sign that the merchant may not have been entirely forthcoming with you.
Finally, these letter serve as an important part of your overall credit history. If you have experienced problems with establishing credit or with accuracy of the credit reports that the credit bureaus have issued about you, these letter provide important information about the state of your credit at the time of the denial. If you ever need to bring a lawsuit against a credit bureau or company that has posted false information on your credit report, these letters are evidence that you will need.What to Do If You Have Been Denied Credit
If you receive one of these letters, called an adverse action notice, take the following steps.
- Read it. Make sure that the reasons make sense to you and are consistent with your credit history. If the letter says that you have been denied based on a judgement or collection account, you should be aware of that account. If not, this is notice that there could be a problem.
- Save the letter and the envelope. These documents should be kept together with the other documents that make up your personal credit file.
- Ask for any reasons. In some instances, creditors won't say why they denied you credit, but they will tell you that you have the right to find out by asking. Do it! Send a letter asking for the reasons behind your credit denial. Be sure to save a copy of the signed letter for proof in case they don't respond.
- Get the credit report. Every adverse action notice should include the identity of any credit bureau that provided credit information used to deny you credit. You have a right to receive a free copy of the information that the credit bureau keeps about you, but you must make your request within 60 days of receiving your denial of credit letter. Again, save a copy of any request as proof that you asked for it.
- Send a copy to your lawyer. Your lawyer can help you understand the letter and the significance of any information in it. Many of these letter violate the law on their face. Your lawyer will be in the best position to help you understand if anything need your attention.
If you would like a copy of letters used to obtain the reasons for a credit denial or your credit bureau file, you can see the Resource page on our web site, and download a free copy of these letters. If you would like any help understanding any credit denial letter, or if you suspect that there is a problem with your credit report, please fee free to call or email us.Check Out Our Videos
Remember, save any letters you receive about your credit or credit denials. You can find more information about credit denial letters on your YouTube channel:
- Want to see a list of the credit bureaus who keep data on you? Check out our Credit Bureau List.
- If you need help deciding which reports you need, you can read our article on Credit Reports to Order.
- Need help getting your credit report, see our article on How to Get Your Credit Report.
You may have a case under the Fair Credit Reporting Act if you notice the following things on your background report:
- Fraudulent identity theft accounts on your credit credit report.
- Someone else's Information on your credit report.
- Paid accounts still showing a balance due.
- Reporting your accounts in good standing as charged off or in collections.
- Discharged debts still reporting as owed.
- Paid tax lies showing as still owed.
- Derogatory accounts more than 7 years old still on your report.
- Previously deleted accounts that have been reinserted on your report.
- Duplicate reporting of the same account.
If you would like help with one of these problems, call (888) 400-CREDIT | (888) 400-2733 or contact us through this site.Credit Restoration and Compensation
If you have completed the dispute process and you still can't get the credit bureaus to correct your report, the FCRA allows you to sue agencies. In most cases we are able to remove the false information, correct the report and get compensation for any credit denials, job loss, or emotional harm caused by the other side's violation of the law.Your Fees Paid for You
We only charge a fee if we are able to recover for you, and The Fair Credit Reporting Act requires the other side to pay your attorney's fees if you win. You pay nothing up front and we take our fee from the other side.Help with Your Dispute
If you would like help with your credit report dispute, you can call our office at (888) 400-CREDIT or simply send us an email through this site. If you prefer, you can visit our resource page for credit reportrequest letters and sample disputesFollow Up and Monitoring
After your case is done, we will help you to regularly check and monitor your background checks with free annual reviews of your background checks and credit reports to insure that you stay free of false conviction information.Work With an Experienced Credit Report Attorney
If you have been the subject of an inaccurate credit report, you may have be able to seek a correction and compensation for any harm. Our firm can help. For more than 25 years, the attorneys of Lyngklip & Associates have represented victims of bogus credit reports credit reports and been a resource for Michigan consumers who need the help of an experienced lawyer.
To learn more or to schedule a free initial consultation with a credit report lawyer, contact our law firm today or call (888) 400-CREDIT | (888) 400-2733 or contact us through this site. In Michigan, you can reach our office at (248) 208-8864.