Denied Credit

Declination Notice Received after Withdrawing Loan Application

Dear Experian,

I withdrew an application for credit from a national bank on the same day of my request. They still sent me the packet, and then several days later they sent me a declined notice. Does this affect my credit score?


Dear CHR,

It sounds as if the bank had already processed your application before you requested that it be withdrawn, which is quite possible with the automated processing systems used today. The result was that the review was completed and a declination notice was sent, but that should not be cause for concern.

Your credit report does not indicate whether an application is approved or declined, so that won't affect credit scores.

Among the first steps the lender would have taken would have been requesting your credit report. That will have result in an inquiry being added to your report, and the inquiry could have a small impact on your credit scores.

Recent inquiries may have a small impact on your credit scores because they indicate you have applied for new debt that does not yet appear on your credit report as an account. However, an inquiry alone will never cause your application to be declined, and they become even less significant after a few months.

However, the fact that you were declined should be an alert that you need to build a stronger credit history before you apply again. Your declination letter should have provided additional reasons for the lender choosing to not approve your application. Typically, there are four factors disclosed and sometimes a fifth. The last one is almost always inquiries because the law requires lenders to list inquiries as a factor if they have any impact on your credit scores, no matter how small.

Focus on the other factors you received in the declination letter to identify what areas you need to concentrate on in your credit history to improve your overall credit worthiness. They will have a much greater impact on your credit scores.

Thanks for asking.
- The "Ask Experian" team

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