When you apply for a loan or an apartment, you may eagerly await your approval notice. However, when an adverse action notice appears in the mail instead, it can be devastating. As such, it’s important to understand what this notice means, the information you can expect to be included, and the importance of working with a California credit report lawyer if you wish to dispute information on your report. The following blog explores these details and more.
What is an Adverse Action Notice?
When you submit an application for a line of credit, insurance coverage, housing, or even a job, you will likely have to undergo a credit screening to determine whether or not your application will be approved. This is a staple for businesses, as you’ll find that this can determine whether or not you would be a good loan candidate based on your prior borrowing history.
For example, you’ll find that if you have a litany of missed payments or too many hard inquiries on your report in a short period of time, your application can be denied as the creditor may deem you a risk as hard inquires may indicate that you are in desperate need of a loan but have been unsuccessful, calling into question your ability to make payments on time.
However, when you receive an adverse action notice, it is indicative that you were denied based on information in your credit report. If the agency responsible for approving your application finds information on your credit report that leads them to deny your application, they are required under the Fair Credit Reporting Act and Equal Credit Opportunity Act to inform you of the reason your application was denied.
Can I Dispute the Findings?
When you receive an adverse action notice from a lender who has denied you, it can be incredibly frustrating. However, it’s imperative to take the necessary steps to protect yourself and improve your credit. When your application is denied because of adverse information on your report, you are entitled to a free copy of your credit report within 60 days of the denial from the credit reporting agency the creditor used to run your credit history. As such, you should request a copy and review it to ensure the information is correct.
In the event you find an error that led to your denial, it is critical to understand that you have the right under the FCRA to dispute any inaccuracies on your report. When submitting a dispute, you should include a hard copy of the credit report with the inaccurate information highlighted and a letter explaining the nature of the error. You should also attach any supplemental documentation showing that the information is incorrect.
After submitting the dispute, it can be tempting to immediately reapply for the loan or housing that you were denied. However, you should note that it can take time before you notice an improvement in your credit, so you should wait and continue to monitor your score before submitting another application.
As you can see, receiving an adverse action notice in the mail can create a number of issues, which is why it’s crucial to connect with an experienced attorney to help guide you through the process of disputing incorrect information on your report. At Loker Law, APC, we understand how frustrating these matters can be. That is why our firm is committed to guiding you through these difficult matters. Contact us today to learn how we can assist you through this process.
