Credit Denial? Know Your Rights

Consumer Bureau issues guidance to creditors

Photo by Clément Hélardot on Unsplash

Finding out you’ve been denied credit can be frustrating. Often, the explanation you receive from a potential creditor is vague, relying on highly technical language. This is due in part to the complex mathematical formulas used to determine credit eligibility. These algorithms take into account a range of factors from available data in order to arrive at a credit granting decision.

However, the Consumer Financial Protection Bureau (CFPB) has recently issued a notice that says creditors must provide a detailed explanation when issuing a denial of credit.

The ruling is due to a new interpretation of the Equal Credit Opportunity Act (ECOA). This law says that if credit is denied, a consumer must be given an explanation. In part, this is designed to protect consumers in the case of inaccurate or incomplete information on a credit report.

Is Your Credit Report Accurate?

The consumer protection attorneys at Finn Law Group offer further explanation relative to the benefits of this new CFPB guidance.