Credit denial

Credit denial,

Definition of Credit denial:

  1. Credit denial is the rejection of a credit application by a prospective lender, usually due to its assessment that the applicant is not creditworthy. The reason 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 that would provide evidence of past repayment experience.

  2. Credit denial is common for an individual who has missed or made delayed scheduled payments or defaulted entirely on a bank loan, credit card debt, car loan, etc. When he applies for new credit—say, a store credit card to purchase a 60" HDTV—he will most likely be denied because the merchant is unwilling to bear the risk that the customer will not make some or all of the scheduled payments for the expensive product.

  3. A loan or credit card application that has been declined by a lender based on its assessment of the applicants credit profile. The denial of credit requires that the lender inform the applicant in writing of the specific reasons for denial within 30 days, and that rejected applicants be provided with the opportunity to obtain a free copy of their credit report.

How to use Credit denial in a sentence?

  1. The rejection can occur due to several reasons, including factors leading an insufficient credit score such as lack of credit history, over-utilization of available credit, late payments, delinquency or default.
  2. Credit denial refers to the rejection of a credit application by a lender.
  3. The Equal Credit Opportunity Act mandates that lenders that deny credit to their applicants must state their reason for the rejection.

Meaning of Credit denial & Credit denial Definition