Did a Lender Offer Less Favorable Terms or Deny You Credit?

If a Business Denies You Credit or Offers Less Favorable Terms

Your credit report and credit scores can affect whether you get credit, as well as the price you pay to get it. If a business denies you credit or offers you less favorable terms — like a higher interest rate — they must give you a notice that includes

• the contact information for the credit bureau that supplied the information about you and
• your credit score — if it was a factor in the decision to deny you credit or to offer you less favorable terms

This can help you figure out what to do next.

Disputing Mistakes on Your Credit Report

If you get one of these notices and think there's a mistake with your credit report

• Get your free credit report. You’re entitled to a free copy of your credit report from the credit bureau the business used to check your credit report. The bureau's contact information will be in the notice. You have to ask for your free report within 60 days of getting the notice.
• Dispute mistakes in your credit report. If a creditor denies your application or offers you less favorable terms because of mistakes in your credit report, dispute the inaccurate information with the credit bureau and the business that supplied the inaccurate information. To learn more about how to do this, see Disputing Errors on Credit Reports.

People sometimes hire credit repair companies to help them fix mistakes on their credit reports. But credit repair companies can’t spur the removal of negative information that’s current and accurate. Only a scammer will promise to do that.

Anything a credit repair company can do legally, you can do for yourself at little or no cost. Read Fixing Your Credit FAQs to learn more about the rules credit repair companies must follow and how to tell if you’re dealing with a scammy credit repair company.

Improving Your Credit 

If your report is accurate but you want to improve your credit

• Know how to find legitimate help. A reputable credit counseling organization will spend time discussing your entire financial situation with you before coming up with a personalized plan to handle your money problems. They won’t promise to fix all your problems or ask you to pay before doing anything.
• Know what negatively impacts your credit score.
  • Paying bills late. If you think you might be late on a bill, call the company you owe money to. Explain that you’re having trouble paying your bill and ask for a payment plan.
  • Keeping balances high. Credit scoring models look at how close you are to being “maxed out,” so try to keep your balances low compared to your total credit limit. Check your credit card limits — and pay down your balances, if you can. If the creditor says you were denied credit or more favorable rates because you’re too near your credit limits on your credit cards, you may want to reapply after you pay down your balances.
  • Frequent credit applications. Many scoring models look to see if you've applied for credit recently. If you've applied for too many new accounts, or taken out large amounts of new credit, it could hurt your score.
  • Read more about managing debt.
• Monitor your credit report. Get a free copy of your credit reports every year from AnnualCreditReport.com. Read Free Credit Reports to learn more. It’s important to make sure your credit report is accurate because credit scores are calculated using information in your credit report, including your payment history and information about the debts you owe. Creditors use your credit score to help decide whether to give you credit and what the terms will be, including what interest rate you’ll pay to borrow money. Your score often changes when the information in the credit report changes. Learn more about your credit score.