[Trish Bowman]

I remember learning that you were to always put the FICO Risk Score Reason Code Number then the Reason Statement on all Adverse Action Notices. Is this still the case for loan denials or can you just list the Reason Statement on the Notice of Adverse Action.
Example of how I remember they should be listed on the Notice of Adverse Action:
Key Factors
09-Too many accounts recently opened
38-Serious Delinquency, and public record or collection filed
18-Number of accounts with delinquency
08-Too many inquiries within the last 12 months

Topic

[rcooper]

Hi Trish,
I can’t find anything in the FCRA or regulations that specifically spells out a requirement to include the reason code and there isn’t an indication of the code in the sample form in Reg B. It’s been a while since I’ve dealt with this so it could be an industry standard. Or could you be thinking of the information that automatically floods into the risk based pricing exception notice from the CRA? I don’t see a problem with including it but I don’t believe it is required – if it is I need to see a source.

Let’s see if we can get some feedback from others.

[jholzknecht]

I agree with Robin – The code is not required, but not aware of anything that prohibits including it.

[jsevers]

I am too in need of the following clarification:
When issuing an adverse action notice to a borrower for reasons unrelated to credit (ie: Loan to value, length of employment, residence) are we required to list the key factors and the credit score on the notice? We have historically always provided this information in all instances of AAN. If someone could clarify.
thank you
Jenny

[rcooper]

You would provide the credit score information on the AAN if it impacted your credit decision. If the applicant’s credit score was excellent then the credit score probably didn’t impact the credit decision. The purpose is to give the customer information they need to correct issues/make themselves a better candidate for credit in the future. From Model form C-1:

This section should be completed if the credit decision was based in whole or in part on information that has been obtained from an outside source.

__Our credit decision was based in whole or in part on information obtained in a report from the consumer reporting agency listed below. You have a right under the Fair Credit Reporting Act to know the information contained in your credit file at the consumer reporting agency. The reporting agency played no part in our decision and is unable to supply specific reasons why we have denied credit to you. You also have a right to a free copy of your report from the reporting agency, if you request it no later than 60 days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency.

[Author]

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