If your application for credit is denied, it is very important for you to secure a copy of the report and determine why you were turned down. If the information on the credit report is accurate, you may need to work on the reason(s) for the denial. For example, if you have been consistently late making payments, you will need to address this issue and make it a number one priority to always pay on time.
Non-Traditional or Alternative Credit reports:
Regulation B of the Equal Credit opportunity Act (ECOA) states that creditor shall consider:
“(ii) on the applicant’s request, any information the applicant may present that tends to indicate that the credit history being considered by the creditor does not accurately reflect the applicant’s creditworthiness, and (iii) on the applicant’s request,, the credit history, when available, of any account reported in the name of the applicant’s spouse that the applicant can demonstrate accurately reflects the applicant’s creditworthiness.”
The creditor can restrict the types of credit history and credit references that will consider, nut a creditor:
“Must consider credit information not reported through a credit bureau when the information relates to the same types of credit references and history that the creditor would consider if reported through a credit bureau.”
This particular important if you been paying on, for example, a mortgage that hasn’t been reported or where the family credit card was in your husband’s name nut you paid the bills.
Having no credit history is an obstacle to obtaining credit. To extend credit to someone, lenders need proof that the borrower is able to make payments in full and on time.
If you have no credit history and you do not have a bank account, many lenders will consider a “non-traditional” credit file as a basis for extending credit.
Remember:Pay on time, avoid too many inquires and public record items, and do not apply for more credit than you need.
