Adverse action – denial reason

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  • #4050
    HMDA Guy 78

    When accepting a credit card application, we typically pull the consumer’s credit report. It is not unusual for us to see that a consumer has mulitiple open credit cards, and often times they are not maxed out, meaning they have room left to be used on the credit cards.

    Is it permissible to deny for the reason of “too much revolving debt” or “Too many revolving accounts”? Our concern is that if the consumer DID max out their cards, then their DTI would be above our 36% policy, and they would possibly have a situation where they have more debt than they can afford.

    However, I do not see this reason listed on the Adverse Action form we use (or other ones online), and in researching this very issue, cannot find anything justifying to use the “Other” reason for this purpose.

    Please share your thoughts? Thanks!


    If was the cause for the denial, I don’t know of a reason why you can’t disclose it. The intent it to help the customer understand why they were denied.

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