Credit reporting companies do not turn down or approve credit

Dear Experian,

Why did you turn down my credit?



Dear ANI,

Experian did not turn down your credit application. That is the lender’s decision. You should have received a declination notice from your lender that describes why it turned down your application. Federal law requires that the notice include a statement that the credit reporting company did not make the decision to deny your application.

Credit reports do not rate your credit or recommend that you be approved or declined, and credit reporting companies like Experian do not make judgments about the information in your credit report. The role of credit reporting companies is to collect credit history information, compile it accurately, and deliver it when requested by a lender.

Lenders use the credit report as your credit references, much like an employer uses the references you provide with your resume. Good past credit management indicates to lenders that you will likely continue to manage your credit well in the future. Most lenders use scoring models to help them determine where your credit history falls in the range of risk, but scoring models also do not recommend whether you should be approved or declined.

Based on their own lending criteria, lenders make the decision about whether to grant credit and what terms will apply.

In some cases your credit report is just one element lenders consider when making a lending decision. They might also factor into the decision your current assets, such as savings, your income, a down payment and other resources that might act as collateral to secure the loan.

If your application is turned down, only your lender can explain why.

Thanks for asking.

- The “Ask Experian” team

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