You have rights if your application for credit is denied. You also have rights if you get credit, but on less favorable terms, like a higher interest rate. By law, you must be given certain information explaining how and why this happened.
The creditor must give you a notice that tells you why they made the decision. If they used a credit score, they are required to tell you that score. They also must give you some additional information. This includes who produced the credit score, the possible range of credit scores, and key factors that negatively affected your credit score.
You can also ask the creditor for more information about why you were denied, but you must do so within 60 days.
If you speak to a creditor for more information, ask for details what would improve your application in the future. If you did get credit, confirm whether you are getting the best rates and terms available. If you're not, ask the creditor for more details about why.
Reasons you were denied, and what you can do
You were too near your credit limits
You may want to pay off any balances you can, and try to keep the amount of credit you're using low.
You have too many credit cards
You may want to close some accounts. Keep in mind, though, that closing accounts can also potentially lower your credit score. This is because it can reduce the total amount of available credit. Also, a longer credit history generally helps your score. So you may want to consider closing accounts you've more recently opened rather than one you've had for many years.
There are inaccuracies or errors in your report
Dispute the inaccurate information. One common inaccuracy is the inclusion of debts that aren't yours on your credit report. This might be a debt of someone with the same name as yours, or a medical debt that your insurance company should've paid but didn't.
If you find an error in the report, you have the right to let the credit bureau know that you disagree with the information, and to ask for an investigation. The credit bureau has 30 days to investigate and, if a mistake is found, they must fix the mistake. To contact a credit bureau, call: Equifax (800) 685-1111; Experian (888) 397-3742; Trans Union (800) 916-8800.
Other things in the credit report
You can find out more about what the credit report says. The creditor is required to give you the name, address, and phone number of the credit reporting agency that supplied the report. Contact the agency to get a copy of the report to find out what the report said. This is free if you make the request within 60 days of being turned down for credit.
Updated: August 2017