Credit Denial? Know Your Rights
Consumer Bureau issues guidance to creditors
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.
The consumer protection attorneys at Finn Law Group offer further explanation relative to the benefits of this new CFPB guidance.
