Question: We pulled a credit report and although the applicant’s credit history is not good, we did not use the applicant’s poor credit history in our decision to deny the loan request.
Are we required to make note of this on the Adverse Action Notice?
Answer: Technically, no. If you truly didn’t use the credit report or the credit score in your decision to deny the request for credit, you don’t have to give the applicant the FCRA Statement or the Credit Score Information disclosures. Keep in mind; however, that “use” of a credit report can be interpreted in different ways. An examiner could try to argue that having a poor credit report in the file could have contributed in some way to your decision. It’s recommended you document your file thoroughly in these instances.
Find out more about other Loan Denials & Other Adverse Action Notices on our two-hour webinar.