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304 North Cardinal St.
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Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
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Receiving an adverse action letter can be a daunting experience, but it doesn’t have to be the end of your financial journey. At O1ne Mortgage, we are committed to helping you navigate through these challenges and improve your credit standing. If you have any mortgage service needs, don’t hesitate to call us at 213-732-3074.
An adverse action letter is a notice that you’ve been denied credit, employment, or even an insurance policy. This notice provides you with information about why you were denied and some helpful resources, both of which can help you determine your next steps.
Regardless of how the company provides the notice, it’s required to include the following information:
There are several reasons why you may be denied credit, employment, or other services. However, you’ll only receive an adverse action notice if the denial was due, at least in part, to information on your credit reports. Potential reasons include:
You don’t necessarily need to respond to an adverse action letter, but if you believe that your situation deserves context, you can reach out to the company that provided the letter and speak with a customer service representative.
For example, if you find debt or derogatory marks you don’t recognize, you can explain the situation and make it clear that you plan to exercise your right to dispute the information with the credit bureaus. Alternatively, if you applied for a mortgage loan, you may be able to pay down some debts and request a rapid rescore.
Whether or not you ask the company that sent you the letter to reconsider, here are some steps you can take to get a handle on your credit situation and improve your odds of getting approved the next time.
With so many different potential reasons, understanding why you were denied can make it easier to know what your next steps should be. For example, if it’s because of a high credit utilization rate, work on paying down high credit card balances. If you have too many recent credit inquiries, you may need to wait at least a few months before applying for credit again.
The primary factors that influence your FICO® Score include:
Check your FICO® Score to see where you stand currently, and consider whether there are other areas you can improve within those broader categories.
While your credit score offers a quick snapshot of your overall credit health, your credit reports provide the source data for your score and can give you more specific information about areas where you can improve. Start by getting a free copy of your Experian credit report, then visit AnnualCreditReport.com to get a free copy of your TransUnion and Equifax credit reports. As you review your reports, look for anything that could be hurting your credit score, then make a plan to address it.
As you review your credit score and report, also look for information that’s potentially inaccurate or even fraudulent. If you find something, you have the right to file a dispute directly with the credit reporting agencies online, by phone, or by mail. Once you’ve submitted your dispute, the credit bureau will work to resolve the issue, including gathering information from the creditor that furnished the information. Once the investigation is complete, which typically occurs within 30 days, one of three things can happen:
While it may be tempting to apply again quickly, it can take some time for your efforts to reflect in your credit reports and credit score. Continue to monitor your credit to understand when the time is right to submit another application.
Depending on what you find in your adverse action letter, prioritize steps to address specific reasons for denial. There are also other actions you can take to build your credit score, including:
While it’s important to work on improving your credit, that doesn’t necessarily mean you can’t get approved for credit in the meantime—and if your financial situation is urgent, you may not have the luxury of waiting. There are some lenders that specialize in working with people who have less-than-stellar credit. While their interest rates and other features may not be as favorable as prime lenders, they may still be able to get you the credit you need. Consider these options only if you absolutely need credit now and can’t wait to work on your credit situation.
At O1ne Mortgage, we understand that life can throw unexpected challenges your way. That’s why we’re here to help you navigate through these financial hurdles. If you have any mortgage service needs, call us at 213-732-3074. Our team of experts is ready to assist you in finding the best solutions for your unique situation.
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