My credit application was denied because of my credit report. What can I do? | Consumer Financial Protection Bureau (2024)

FAQs

My credit application was denied because of my credit report. What can I do? | Consumer Financial Protection Bureau? ›

File a complaint online at www.consumerfinance.gov or by phone toll-free at 1-855-411-CFPB.

If you were denied because of incorrect information in your credit report, get your credit report and dispute the errors that are in it. If you were denied because you have too many credit cards or too much outstanding debt, you can reapply after paying down your balances or closing some accounts.

Creditors must notify consumers of the reasons behind a denial as mandated by the Equal Credit Opportunity Act. You can appeal the decision to deny credit directly through your lender.

You received a notice that you were denied credit, insurance, or employment or experienced another “adverse action” based on a credit report. In this case, you have a right to a free report from the credit reporting company identified in the notice.

If you've been denied credit, the creditor must give you the name and address of the agency to contact. Different federal agencies, including the FTC, share enforcement responsibility for the ECOA. Report your concerns to the creditor. Sometimes you can persuade the creditor to reconsider your application.

No, denied credit applications won't appear on your credit report. Lenders don't report whether your applications were approved or denied because even approved applications don't necessarily result in a new account. Generally, if you're approved for a credit card, the card issuer will open the account automatically.

Getting a personal loan with a co-signer that has a strong credit score and a solid income can boost your application. Your co-signer – ideally, a family member or close friend – will apply alongside you, and you'll both be responsible for repayment of the loan.

Can you appeal a credit denial? ›

The reconsideration process includes a manual review of your credit report by an analyst with the bank or card issuer. This is your opportunity to answer some questions and see if you can turn that denial into an approval. Sometimes it's as simple as reallocating credit lines or submitting identity verification.

While there's no limit on disputes, if you send a dozen in the same week or month, you run the risk that credit reporting agencies might see you as someone who's frivolous with disputes. Make sure all your disputes are grounded in facts and that you provide documentation to back them up.

You should dispute with each credit bureau that has the mistake. Explain in writing what you think is wrong, include the credit bureau's dispute form (if they have one), copies of documents that support your dispute, and keep records of everything you send.

A hard inquiry from a card application can cause a small, temporary drop in credit scores. A denial or approval won't hurt your credit scores, because decisions aren't reflected in credit reports. When making lending decisions, card issuers use credit reports and credit scores to determine creditworthiness.

Read the rejection notice

The issuer must give a reason for rejecting the application if it's because of information in your credit report. It's an "adverse action" notice. If the denial is because of income or another non-credit factor, the issuer will probably tell you that, too.

Again, the ECOA requires creditors and lenders to provide a notice if an applicant is denied credit or granted credit on terms different from what they requested. This notice is called an "adverse action notice." Under the ECOA, the definition of an "adverse action" includes: denying a credit application.

One of the fastest ways to build credit is by becoming an authorized user on someone else's card, like a family member or close friend. You can piggyback off the primary cardholder's credit and establish your credit history.