Adverse Action and Your Free Credit Report
The Fair Credit Reporting Act, the law that governs credit reporting, requires you to be sent an adverse action letter whenever you have an application denied because of information in your credit report. The adverse action letter should explain the reasons you were denied and inform you of your right to receive a free copy of the credit report that was used in the decision. You’ll only have about two months—60 days—to order your free credit report. Respond quickly if you want to receive a free full copy of your credit history. The adverse action letter will include the name and address of the credit bureau that provided the credit report used in the decision along with instructions for order your free credit report. Each of the three major credit bureaus also has a web page with information on ordering adverse action credit reports. You may be able to get your free credit report online rather than send a letter or call for access.
Equifax Experian or call 1-866-200-6020 TransUnion
Limits on Free Credit Report
In the case of an adverse action, you’re only entitled to order a free credit report from the credit bureau who provided the report used in the creditor’s decision. For example, if the lender reviewed your Equifax credit report to process your application, you’re only entitled to a free Equifax credit report. The credit bureaus know whether to provide a free copy of your credit report based on your recent credit inquiries. Make sure you order the free copy of your credit report to understand the information that led to your application being denied. It may be due to high balances, late payments, collection accounts, or even errors. If there’s inaccurate information in your credit report, you can dispute it with the credit bureau to have it corrected. Once your credit report is updated with the correct information, you can resubmit your application for a better chance of being approved.
Other Denial Factors
You can only order this specific free credit report when the information in your credit report was the reason you were denied. For example, if you were denied because your income was too low, you don’t qualify for a free credit report under this particular section of the Fair Credit Reporting Act. The creditor is still required to send a letter explaining why you were denied, but the letter will not include instructions for ordering a free credit report.
Annual Credit Report Access
The credit report you get when you’re denied credit is in addition to the annual credit report that you can normally order once a year from the three credit bureaus through AnnualCreditReport.com.
