You've Been Declined For a Loan--Now What?
By Jill Terry
filling out all the forms and waiting for what seemed to be
an eternity, your application for credit has been declined.
Do you have to accept the bad news and figure out another
way to finance your dreams? Not if the bank made an error
in reviewing your application--and banks do make errors.
Financial institutions must follow certain rules when they
decline an applicant. By knowing the rules, you can challenge
your bank's decision from a position of greater power.
So, what do you do if you've been declined in error? If your
bank has not notified you in a timely manner or has used reasons
that are not specific, you have two options. You can either
challenge the bank directly or you can report the incident
to the federal agency that serves as that bank's regulatory
body. Fines and other punishments have been levied on banks
for just these types of violations. If you're not sure which
agency regulates your bank, check your decline letter--the
information is supposed to be disclosed (it's usually at the
bottom of the document they send you, often in small print).
If the reason for decline is just plain wrong and the bank
obtained the information from a credit bureau, you'll need
to contact the credit bureau to correct their data. The name
and location of the credit bureau must also be disclosed to
you if the bank relied on the information to reach its decision.
For more information on Regulation B, visit the Federal
Reserve Bank's Web site. For a list of available consumer
protection publications, visit The Federal Reserve's consumer