It’s no fun being denied anything, especially credit. Usually when someone is trying to get a line of credit, it’s for a big reason or major life milestone. Having a credit application denied can feel like a real setback. But this rejection isn’t something to take personally. It’s more common than people realize and doesn’t spell doom for your financial future. In fact, credit denials can be a good opportunity to take proactive steps to improve your credit health long-term.
How will I know I’ve been denied credit?
If a lender denies your credit application, they will send you a letter called an adverse action notice. Don’t worry—it sounds more menacing than it really is. This letter will explain why the lender denied your application and give you information about the credit reporting agency they got your information from. With the notice, you are entitled to get a free credit report from that agency within 60 days. While the credit reporting agency provides your information, the lender ultimately makes the decision on whether to grant credit or not. If you need more information specifically about your denial, it’s usually best to contact the lender directly.