When You Are Denied By A Credit Lender
The Dodd-Frank Act of 2011 requires that lenders send a letter explaining why a consumer was denied credit or offered less-favorable credit terms. Unfortunately, these letters are usually filled margin-to-margin with industry jargon and two-digit codes that don’t really help you to understand where you stand with your credit score.
In fact, studies have shown that less than 25% of Americans denied for a line of credit really understand why. Of course it is easy to understand that your credit score is too low, and that it must be repaired before applying for a loan again. Unfortunately, gleaning how to go about that is all but impossible from most rejection letters.
Credit Denial Codes At A Glance
There are three major credit bureaus which use the same set of “credit risk factor” codes when reporting to lenders and banks. Examples of these codes and explanations offered for the code are as follows:
• Reason 01: Amount owed on accounts is too high.
• Reason 04: Too many banks or national revolving accounts.
• Reason 14: Length of time accounts have been established.
• Reason 21: Amount past due on accounts.
• Reason 32: Lack of recent installment loan information.
• Reason 39: Serious delinquency.
• Reason 40: Derogatory public record or collection filed.
As you can see, while some of the codes are relatively simple to understand, others will likely leave you scratching your head in confusion.
Research material is readily available on the internet to help explain some of the terminology, but it is often extremely difficult to understand what needs to be done to fix it – even if you are well-versed in the shop-talk of credit lenders.
Trust The Top Arizona Credit Repair Experts To Help
At the end of the day, even if you have the extra hours to devote to research, you will likely still have questions. These questions can only be adequately explained by professional credit repair counselors and advisers.
Credit Absolute is proudly known as the most trusted Phoenix Credit Repair Company. If you have questions concerning your recent credit denial, contact us today.