Obtaining a free report after being declined or adverse action is taken



Dear Experian,

I was approved for a credit card in October 2013. I have never exceeded the limit and have made all payments on time. I just received a notice that they are reducing my credit limit to the same amount as my current balance on the card. The reasons state, “Derogatory public record information, too few accounts currently paid as agreed, length of time of credit established, and lack of recent installment loan information.” One of the other credit reporting companies will not release a free credit report. This doesn’t seem right to me. What should I do?

-        PSJ

Dear PSJ,

Any time you are declined credit or have adverse action taken in response to your application, the creditor must provide you with the name of the credit reporting company it used to obtain your credit report. You are only entitled to a free report from the company used by the lender when an application is declined.

In order to obtain your free report, contact the credit reporting company identified in the adverse action notice provided by the lender. The adverse action notice should include instructions for contacting the credit reporting company.

Even though you were just approved for the card, the credit card company has a right to check your credit report periodically and to make changes to the account. Review your contract closely. It likely indicates the lender can reduce your credit limit or possibly change your interest rate based on information in your credit history.

You mentioned that you have never made a late payment on this account, but have you missed payments on other accounts? Lenders often monitor the credit risk of their customers. If you start missing payments with other lenders, or showing risky behavior, they may take action to protect themselves from losses.

When you order a copy of your credit report, you should be able to relate the comments from your lender to your history. If you feel any of the information listed on the report is incorrect, you can contact the credit reporting agency you received the report from in order to dispute the information.

And, remember you may obtain a free report from each of the credit reporting companies at www.annualcreditreport.com.

Thanks for asking.

Rod Griffin
Director, Public Education

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