Credit Denial

Turndown of an application for credit. Also called a credit decline or rejection. The Equal Credit Opportunity Act requires lenders who deny consumer credit applications to state in writing the reasons why the applicant was rejected. Reasons for denial can vary from insufficient information in the credit application or lack of previous borrowing experience to a poor credit history. If turned down on the basis of information supplied by other creditors, applicants have the opportunity, under Regulation B to review a copy of their credit report. See also Adverse Action; Credit Scoring; Effects Test.