Credit Denial

DEFINITION of 'Credit Denial'

The rejection of a credit application by the prospective lender. Usually credit denial comes as a result of the borrower's perceived inability to pay back the loan. This is often due to previous blemishes on the borrower's credit history, but it can also stem from an incomplete credit application or lack of any kind of borrowing history.

BREAKING DOWN 'Credit Denial'

The Equal Credit Opportunity Act mandates that lenders who deny credit to their applicants must state their reason for the rejection. Borrowers who are rejected because of adverse reports from other creditors have the right to review a copy of their credit report. This term is synonymous with credit decline or credit rejection.

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RELATED FAQS
  1. How many free credit reports can you get per year?

    Individuals with valid Social Security numbers are permitted to receive up to three credit reports every 12 months rather ... Read Full Answer >>
  2. Is it possible to get a free credit report from Equifax?

    It is possible to get a free credit report from Equifax, as well as the other two major credit bureaus, Experian and TransUnion. ... Read Full Answer >>
  3. Do free credit reports affect your credit score?

    Free credit reports do not impact your credit score. Credit inquiries are divided into two categories: soft inquiries and ... Read Full Answer >>
  4. Does a free credit report show your credit score?

    The free credit reports available from the three credit reporting agencies do not include your credit score. Under the 2 ... Read Full Answer >>
  5. Is getting a free credit report safe?

    Getting a free credit report can be safe if you are careful about the particular website from which you get it. Credit reports ... Read Full Answer >>
  6. How accurate are free credit reports?

    Free credit reports are usually considered mostly accurate, which is why it is important to regularly examine your own reports. ... Read Full Answer >>
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