New credit disclosure rule July 21
New Credit Disclosure Rule
The Dodd-Frank Wall Street Reform and Consumer Protection Act has gone into effect. This new credit disclosure rule pulls back the curtain on bank lending rejections, forcing them to tell consumers how they make lending decisions.
Shrewd consumers will analyze their credit situation carefully before applying as always. A trusted friend can be enlisted to help you go over your credit reports before applying for anything major. Better still enlist the help of a finance or credit professional or lawyer. It is always better to know ahead of time what your chances are likely to really be than to have an unnecessary inquiry and deal with rejection. The new credit disclosure rule is not a quick fix. But if you are denied credit after your best efforts it is there for you to learn for the future.
Rights Under New Credit Disclosure Rule if Denied Credit
Under the new credit disclosure rule Lenders and creditors who deny a consumer’s application for a credit card–or who give less favorable terms– must disclose all factors that went into their decision including the credit score. Consumers must also be notified of the date of inquiry and the name of the consumer reporting agency used. Under the new credit disclosure rule If the lender uses his own scoring model instead of FICO, the customer must be told that the score doesn’t come from a consumer reporting agency. The new credit disclosure rule requires the lender to give the range of the scoring model the lender used.
Only those who are rejected or given unfavorable terms under the new credit disclosure rule are entitled to a report.