A decline reason is given when an applicant is denied credit. Consumers must receive this information in writing as part of the decline letter. Business applicant may request the information in writing.
How
- Review the decline reasons supplied by DecisionPro or noted in the Abrigo credit memorandum.
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No more than 4 decline reasons should be given, but always more than one.
| Adverse Action Reason | Explanation |
|---|---|
| Credit application incomplete | Alternate procedures exist to provide a separate notice of incomplete application that incorporates adverse action language should information not be provided. |
| Insufficient number of credit references provided | Bank does not have a set requirement for number of references, so this reason should not be selected. Alternative reasons include "No credit file" and "Limited credit experience", both of which are based off of credit bureau report. |
| Unacceptable type of credit references provided | Bank does not have a set requirement for types of credit references, so this reason should not be selected. Could also be "No credit file" and "Limited credit experience", both of which are based off of credit bureau report. |
| Unable to verify credit references | Should only be used if attempt is made to verify credit reference provided on application through either the credit report or direct contact. File must document what attempts were made to verify credit references. |
| Temporary or irregular employment | Use for individual who has seasonal employment, or indicate their hours and salary fluctuate significantly. |
| Unable to verify employment | Should only be used if attempt is made to verify employment through direct contact. File must document what attempts were made to verify employment. |
| Length of employment | Should be used where applicant does not meet credit standard of 2 years stable employment (not necessarily the same job, but some degree of stability for two years must be established). |
| Income insufficient for amount of credit requested | Should only be used where borrower's current debt-to-income ratio is not within bank standards. |