Experian, TransUnion and Equifax now offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com.
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Creditors, employers, insurance companies and landlords often request your credit report from at least one of the credit bureaus—Experian, TransUnion or Equifax—when reviewing your application. If your application gets declined because of information in your credit report, you have the right to request a free copy of your credit report from the same credit bureau.
What Is an Adverse Action Letter?
The Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA) require certain organizations to send adverse action letters after taking an adverse action against consumers. These might include when a company:
- Denies your credit, job, rental or insurance application
- Offers you less favorable terms on a new account or lease
- Closes or makes unfavorable changes to your account, such as lowering your credit limit or increasing your premiums
The company has to send this letter if its action was based at least partially on information in your credit report. Alternatively, it may be able to give you an adverse action notice orally or electronically.
If you receive an adverse action letter or notice, it will contain several pieces of information:
- The reasons you were denied: These descriptions can be short, and they don't have to specify how something affected your application. For example, a reason could be "length of residence" or "credit application incomplete," but the letter doesn't need to specify how long you need to live somewhere to qualify or which part of the application was incomplete.
- Credit bureau information: You'll receive contact information for the credit reporting agency that created the credit report used, including its name, address and telephone number.
- Credit scores: If the organization used a credit score—some choose not to, some use several scores and employers never receive credit scores—you'll see the credit scores, scoring models, scoring range, who provided the score and the date that the score was generated.
- Adverse action codes: If a credit score was used, you'll also receive up to four credit score risk factors, sometimes called reason codes or adverse action codes. These tell you why your credit score wasn't higher in order of most to least influential reason. If hard inquiries were a reason, that can be included as a fifth reason code.
- Your right to request a free credit report and dispute errors: The letter will also inform you that you can request a free credit report from the credit bureau listed within 60 days, and that you have the right to dispute inaccurate or incomplete information in your report.
How to Get a Free Credit Report After Being Denied Credit
You can follow the instructions on the adverse action letter if you want to receive your free credit report. If the company that denied your application only requested one of your credit reports, you'll be able to get a free copy of your report from the same bureau.
For example, if the creditor used your Experian credit report, you can use the Experian Report Access page to request a copy of your credit report. There are also options to request your free Experian credit report by mail or over the phone. If the creditor used a credit report from one of the other credit bureaus, you'll have to request your report from that company.
How to Access Free Credit Reports From All Three Credit Bureaus
Your credit reports from the three major credit bureaus often aren't identical, which is one reason you may have different credit scores. This is also why reviewing all three reports for errors can be important, especially if you're preparing to buy a home or car or apply for other credit.
AnnualCreditReport.com can help you request free credit reports from all three bureaus. The website's name refers to the federal law that gives you the right to request a free copy of your credit report from each of the bureaus at least once every 12 months. But new policies let you request a new credit report from each bureau every week.
One drawback to using the site is that the credit reports you receive from AnnualCreditReport.com don't include a credit score.
If you want a credit report and score, try going directly to the credit bureaus. For example, Experian offers members a free credit report with monthly updates and a FICO® Score☉ based on the report. Or, you can get an Experian CreditWorksSM Premium membership to receive monthly credit reports from all three bureaus and FICO® Scores based on the reports.
Get Preapproved to Decrease Your Chances of Getting Denied
It's important to review your credit reports for errors that are hurting your credit scores. But getting a free copy of your credit report doesn't offer much consolation after a denial, especially when you can already get free copies throughout the year.
If you want to increase your chances of getting approved, try to improve your credit and look for lenders that offer prequalification. These can show you estimated loan and credit card offers based on your credit profile with a soft credit inquiry that won't hurt your credit scores.