Denial Of Credit
What is denial of credit?
Denial of credit is nothing but your application being rejected by the party from whom you were expecting to get a loan.
The reasons of denial of credit
The credit denial generally happens as a result of either of these perceived situations
- The lender is in the impression that the condition of the borrower is not such that he or she will be able to return the amount that has been borrowed
- The borrower has a blotched credit history that gives an idea of how he or she has failed to return the borrowed amount in the past
- Also, if the borrower has no credit history of any kind, the lender may refuse to lend the money to the borrower
- The last reason for the denial of credit can be an incomplete application that does not have all the required fields completely filled out.
Though the lenders can any time refuse to lend money to a borrower, the Equal Credit Opportunity Act has made it mandatory for all the lenders to make it clear to the borrowers the reason of refusal of the credit. If the borrower feels that the denial of credit is based on wrong reasons or the reasons that are not applicable in the present scenario they may even ask to get the copy of their credit report reviewed. The term denial of credit is same as credit decline or credit rejection and can be used interchangeably.
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- equifax denial credit letter