Adverse Action Notice

My husband and I have had our share of bad credit, but have recently tried to clean it up and made it a point to never be late on anything…however when we tried to get furniture we were denied by 3 offices…what could have happened…confused

L.V.

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Hi L.V.,

Lending in all forms: consumer loans, mortgage lending, business loans, auto loans, unsecured credit, etc. has become more of an underwriting challenge.  The importance placed on that three-digit FICO score is increasing every day.  What once required a 620 credit score now requires a 680.  What once required a 680 now requires a 720. 

We can play that game at the Broken Credit Blog.  We can beat the lenders at their own game.  The key is to get that credit score higher before you make that purchase.

L.V., you want to use the adverse action notice as a means of requesting a copy of your free credit report or what is referred to as a “free disclosure of the consumer’s file” in the FTC excerpt below.  

Adverse Actions Based on Information Obtained From a CRA

If a user takes any type of adverse action as defined by the FCRA that is based at least in part on information contained in a consumer report, Section 615(a) requires the user to notify the consumer. The notification may be done in writing, orally, or by electronic means. It must include the following:

• The name, address, and telephone number of the CRA (including a toll-free telephone number, if it is a nationwide CRA) that provided the report.
• A statement that the CRA did not make the adverse decision and is not able to explain why the decision was made.
• A statement setting forth the consumer’s right to obtain a free disclosure of the consumer’s file from the CRA if the consumer makes a request within 60 days.
• A statement setting forth the consumer’s right to dispute directly with the CRA the accuracy or completeness of any information provided by the CRA.

There’s lots of reading for you to do on the Broken Credit Blog.  Also, I’ve asked Adriel to give you a call.

Thanks for the questions and let’s make it a great 2008!

Paul

(source=ftc.gov/os/2004/11/041119factaapph.pdf)