When you apply for a line of credit, a new job, or a personal loan, the last thing you expect to receive is an adverse action notice in the mail. Unfortunately, this is a denial letter required by law. As such, understanding the information included in this letter and whether or not you can dispute the decision made by the creditor is critical. The following blog explores what you should know about these complicated matters and the importance of working with a San Diego consumer lawyer to explore your options during this frustrating matter.
What Is an Adverse Action Notice?
If you have been denied a loan application, insurance, housing, or employment due to information on your credit report, the Fair Credit Reporting Act and the Equal Credit Opportunity Act require the organization to inform you of what influenced their decision to deny the application. Under federal law, this notice can be provided over the phone, in person, or through the mail. If the letter is mailed, you should receive it within 10 days of the denial.
While this is most commonly used to inform consumers that their application was denied, it can also be used for other actions. For example, if you are adversely approved for a loan, it means that instead of a 2% interest rate, your history warrants the lender to approve you for a 10% rate instead. Additionally, this can be sent from financial institutions you are already a member of, such as a notice from your credit card issuer that your credit limit was decreased as a result of recent missed payments.
Though the exact wording of the notice may vary, companies are required by law to provide certain information. This includes your credit score, which reporting agency supplied the information the company used to make a decision, why the application was denied, and how to get a free credit report within 60 days of the denial.
While these notices are primarily used to inform applicants that they did not obtain the loan they applied for, it is also a useful tool to help ensure consumers can understand what areas of their financial history need improvement.
Can I Dispute the Findings in the Notice?
It’s important to understand that you are not required to respond to or dispute the notice. However, if you believe an error was made or the denial is due to an inaccuracy on your credit report, you may wish to dispute the findings listed in the notice.
If you make the decision to dispute the conclusion drawn by the organization, you should gather a number of documents before submitting the details. For example, you should gather evidence that supports the dispute and a copy of your credit report. In a letter, you should then explain, in detail, why the information in the adverse action notice is incorrect. For example, you may have been denied a loan because of an outstanding balance. However, after further investigation, you may find that this account is the result of identity theft and should not impact your ability to secure loans, as it was not your doing.
As you can see, receiving an adverse action notice can severely impact your ability to obtain loans, housing, and employment. That is why it is critical to connect with an experienced consumer protection attorney with Barthel Legal. Our team understands how overwhelming these matters can be, which is why we will do everything possible to help you through these difficult times. Our team can help you gather evidence and craft a dispute letter so the errors of the credit reporting agencies don’t hold you back. Contact us today to learn more.
