Auto Loan Adverse Action Notice: What It Means

Which Consumer Report Caused My Application Denial?

You apply for a credit card, auto loan, apartment, bank account, insurance policy or even a job—and get denied. The notice may mention a consumer report, background report, credit bureau, tenant-screening company or specialty reporting agency, but it may not be obvious which report actually influenced the decision.

The fastest way to find out is usually the adverse action notice. When a business takes certain unfavorable actions based in whole or in part on information from a consumer report, federal law generally requires the notice to identify the consumer reporting company that supplied the report. You can then request a free copy from that company and review the information that may have affected your application.

This guide explains how to identify the correct report, what different types of applications may use, how to request the report for free and what to do if the information is wrong.

On This Page
Which Consumer Report Caused My Application Denial?

Quick Answer

Look at the adverse action notice you received after the denial. If the decision was based in whole or in part on a consumer report, the notice generally should identify the consumer reporting company that supplied it.

The notice may list:

  • The reporting company's name
  • Its address
  • Its phone number
  • Your right to request a free copy of the report
  • Your right to dispute inaccurate information

For many adverse-action situations, you generally have 60 days from receiving the notice to request the free report identified in it.

Do not automatically order only your Equifax, Experian and TransUnion credit reports. Depending on the application, the business may have used a specialty report such as ChexSystems, Early Warning Services, a tenant-screening report or another consumer reporting company.

What Is an Adverse Action Notice?

An adverse action notice is a notice explaining that a business took an unfavorable action involving your application or account.

Examples can include:

  • Credit application denied
  • Loan denied
  • Rental application denied
  • Checking account denied
  • Insurance denied
  • Insurance offered on less favorable terms
  • Credit offered on worse terms
  • Employment decision based on a background report

The exact legal requirements depend on the transaction, but when a consumer report contributed to the adverse action, the notice is one of the most useful documents you can receive.

Think of the notice as the map to the report. Instead of guessing which database hurt your application, start with the company named in the notice.

How to Find Which Consumer Report Was Used

Look for wording such as:

  • “Our decision was based in whole or in part on information obtained from…”
  • “Consumer reporting agency”
  • “Credit reporting agency”
  • “Tenant screening company”
  • “Checking account reporting company”
  • “Background screening company”

The notice may identify a familiar company such as:

  • Experian
  • Equifax
  • TransUnion
  • ChexSystems
  • Early Warning Services
  • LexisNexis Risk Solutions

Or it may name a specialized screening company you have never heard of.

Use the exact company name from the notice. Do not assume a lender, landlord or bank used the same reporting company that another business used previously.

What the Adverse Action Notice Should Tell You

When adverse action is based on a consumer report, the notice generally should include:

  • The name of the consumer reporting company
  • Its address
  • Its telephone number
  • A statement that the reporting company did not make the adverse decision
  • Notice that you can request a free copy of the report
  • Notice that you can dispute inaccurate or incomplete information

For credit decisions, additional information may apply, including the credit score used and key factors affecting that score when required.

The reporting company supplied information. The lender, landlord, bank, insurer or employer made the actual decision.

The Consumer Reporting Company Did Not Deny You

This distinction matters.

If a notice says the lender used Experian, that does not mean Experian personally decided to reject your application.

Similarly:

  • ChexSystems does not decide whether your bank account is opened.
  • Early Warning does not decide whether a bank accepts you.
  • A tenant-screening company does not make the landlord's final rental decision.

The reporting company provides information.

The business receiving that information applies its own criteria and makes the decision.

Do not ask the consumer reporting company to explain why the lender or landlord rejected you. Ask it what information is in your report. Ask the decision-maker for the reason for the decision.

Can You Get the Report for Free After a Denial?

Often, yes.

If adverse action was based on information from a consumer report, federal law generally gives you the right to obtain a free copy from the reporting company identified in the notice.

This can apply to reports used for:

  • Credit
  • Rental housing
  • Checking accounts
  • Insurance
  • Employment
  • Other FCRA-covered decisions

The free adverse-action report is especially useful because it lets you inspect the actual reporting company involved in the decision.

The 60-Day Rule

For many FCRA adverse-action situations, you must request the free report within:

60 days after receiving the adverse action notice

Do not put the notice aside for several months.

Save:

  • The notice
  • The envelope or email
  • The date you received it
  • The application number
  • The name of the reporting company

Request the report promptly even if you do not plan to challenge the denial immediately. You can review the information while the application details are still fresh.

Credit Card or Loan Application Denied

If you applied for:

  • A credit card
  • Personal loan
  • Mortgage
  • Line of credit
  • Other consumer credit

the lender may use information from:

  • Equifax
  • Experian
  • TransUnion
  • A specialty consumer reporting company
  • Internal lender information

For a credit denial, CFPB guidance says the lender must provide the main reasons for the decision or tell you how to obtain them.

If the denial was based on a credit report, the lender also must identify the reporting company that supplied it.

The reason for denial and the name of the report provider are not necessarily the same thing. For example, the reason may be “high revolving balances,” while the report provider is Experian.

Auto Loan Denied

Auto lenders may use one or more credit reports, scores or other consumer information.

If the application was denied:

  • Read the adverse action notice.
  • Identify the reporting company used.
  • Request the free report if eligible.
  • Compare the stated denial reasons with the report.
  • Look for inaccurate balances, late payments, collections or identity-theft accounts.

For the full process, see:

Auto Loan Denied: What to Do Next

Apartment Application Denied

Rental decisions may involve much more than a traditional credit report.

A tenant-screening report can contain information involving:

  • Credit history
  • Rental history
  • Eviction records
  • Public records
  • Identity verification
  • Other tenant-screening data

The CFPB says that when a landlord denies an application because of a tenant-screening report, the adverse action notice must identify the company that supplied the report and explain your right to request a free copy within 60 days.

Do not assume the landlord used only Experian, Equifax or TransUnion. Tenant screening is a large specialty consumer-reporting industry.

See:

Apartment Application Denied: What to Do Next

Checking or Savings Account Denied

A bank-account denial may have nothing to do with your traditional credit score.

Banks and credit unions may use specialty deposit-account reports from companies such as:

  • ChexSystems
  • Early Warning Services
  • Certegy
  • TeleCheck
  • CrossCheck
  • Global Payment Check Services

These reports can involve checking-account and payment history.

Possible negative information may include:

  • An unpaid negative balance
  • An involuntarily closed account
  • Suspected account fraud
  • Returned checks
  • Other deposit-account problems

You can have an excellent credit score and still be denied a checking account because of a specialty banking report.

If a bank denied your application based on one of these reports, the adverse action notice should identify the reporting company.

Related guides:

Insurance Application Denied or Priced Higher

Insurers can also use consumer reports.

Depending on the type of insurance, that may include information relating to:

  • Credit
  • Insurance claims
  • Property records
  • Driving-related records
  • Other specialty consumer information

The CFPB notes that an insurance company that takes adverse action based on a consumer report must identify the consumer reporting agency used.

You can then request the report and review the information for errors.

Insurance reports can be different from your normal credit reports. Do not assume all insurance underwriting information appears at Equifax, Experian or TransUnion.

Job or Background Check Problem

Employment background reports can include:

  • Credit information
  • Criminal background information
  • Public records
  • Employment history
  • Other background-screening information

The CFPB says employers generally must get your written permission before obtaining an employment consumer report.

If an employer plans to take adverse action based on that report, federal law provides additional protections, including disclosure of the report before the final adverse action in many employment situations.

The final adverse action notice should identify the consumer reporting company involved.

Employment background checks can come from hundreds of different consumer reporting companies. Use the exact company named by the employer.

Common Consumer Reports by Application Type

Application Possible report type
Credit card Credit report / credit score
Auto loan Credit report / credit score / lender-specific information
Mortgage Credit reports and mortgage-related consumer data
Apartment Tenant-screening report and possibly credit report
Checking account Deposit-account screening report
Insurance Credit-related and insurance specialty reports
Employment Employment background report

This table shows possibilities, not guarantees. The adverse action notice is more reliable than guessing based on the type of application.

Equifax, Experian and TransUnion

The three nationwide credit reporting companies are:

  • Equifax
  • Experian
  • TransUnion

Their reports commonly contain:

  • Credit cards
  • Loans
  • Payment history
  • Collections
  • Credit inquiries
  • Other credit-related information

If one of these companies is named in your adverse action notice, request that specific report.

Also consider reviewing all three because information can differ between bureaus.

See:

How to Get a Free Credit Report From All 3 Bureaus

ChexSystems

ChexSystems is a specialty consumer reporting company focused largely on deposit-account information.

Its reports can include information involving:

  • Checking-account applications
  • Account openings
  • Account closures
  • Reasons for closure
  • Other deposit-account history

If your bank-account denial names ChexSystems:

How to Get Your ChexSystems Report for Free

Early Warning Services

Early Warning Services also provides specialty banking and payment information.

Banks may use Early Warning information when evaluating whether to open an account or assess certain deposit-account risks.

Early Warning and ChexSystems are separate companies.

A clean ChexSystems report does not prove your Early Warning file is clean.

If the denial notice identifies Early Warning:

How to Get Your Early Warning Services Report for Free

LexisNexis

LexisNexis Risk Solutions maintains several consumer-reporting products and databases.

Depending on the product and application, information can involve:

  • Identity information
  • Public records
  • Property information
  • Insurance-related information
  • Other consumer data

If your adverse action notice specifically identifies LexisNexis, request the applicable report named in the notice rather than assuming every LexisNexis product contains the same information.

See:

How to Get Your LexisNexis Consumer Report for Free

Tenant-Screening Companies

There are many tenant-screening companies.

A landlord may obtain a report containing:

  • Credit information
  • Eviction history
  • Rental history
  • Public-record information
  • Identity-verification information

If your rental application was denied, use the company named in the landlord's adverse action notice.

Do not pay for a random “rental background report” before identifying the company the landlord actually used.

What if More Than One Consumer Report Was Used?

Some applications involve multiple data sources.

For example, an auto lender might use:

  • A traditional credit report
  • A credit score
  • Internal lender records
  • Other verification information

A landlord might use:

  • A tenant-screening report
  • A credit report
  • Income verification

If more than one consumer reporting company contributed to the adverse action, review each company identified in the notice or other disclosures.

Ask the decision-maker whether more than one consumer reporting company was used if the notice is unclear.

What if the Notice Does Not Name a Consumer Reporting Company?

There are several possibilities.

The decision may have been based on:

  • Information you supplied in the application
  • Internal business records
  • Income or debt criteria
  • A consumer report that should have triggered disclosure requirements
  • A combination of several factors

Contact the business and ask:

  • Was a consumer report used?
  • Which reporting company supplied it?
  • Was the decision based in whole or in part on that report?
  • Can you send me the adverse action notice again?

Do not assume a missing reporting-company name means no consumer report was used. Ask the business directly if the notice is incomplete or confusing.

What to Ask the Business That Denied You

Hello. I received notice that my application was denied or approved on less favorable terms.

Could you please tell me:

  • Whether a consumer report was used
  • The name of every consumer reporting company used
  • Whether a credit score or other score was used
  • The main reason or reasons for the decision
  • How I can obtain another copy of the adverse action notice

Thank you.

How to Request the Correct Consumer Report

Read the adverse action notice

Find the name and contact information of the reporting company.

Contact that exact company

Do not substitute a different bureau simply because it is more familiar.

Mention the adverse action

Explain that you are requesting the report after an application denial or other adverse action.

Request the free copy promptly

For many adverse-action reports, the free-copy request must be made within 60 days.

Complete identity verification

The reporting company may require identifying information before releasing your report.

Save the report

Keep the original before filing any dispute.

What to Look for in the Report

Review information connected to the type of application.

Credit Report

  • Late payments
  • Collections
  • Balances
  • Hard inquiries
  • Accounts you do not recognize

Checking Account Report

  • Closed accounts
  • Unpaid balances
  • Fraud designations
  • Account-opening history
  • Records that are not yours

Tenant-Screening Report

  • Eviction records
  • Rental history
  • Identity information
  • Public records
  • Records belonging to another person

Compare the actual report with the stated reason for denial rather than assuming every negative item caused the decision.

What if the Consumer Report Is Wrong?

You generally have the right to dispute inaccurate or incomplete information in a consumer report.

Examples include:

  • An account that is not yours
  • An incorrect balance
  • A wrong late-payment status
  • An account shown open when it is closed
  • A paid debt still showing a balance
  • An incorrect eviction
  • An incorrect bank-account closure reason
  • Mixed-file information from someone with a similar name

Dispute the specific error rather than simply asking the reporting company to “delete everything negative.”

How to Dispute an Error

For inaccurate information:

Dispute with the consumer reporting company

Identify exactly what information is incorrect.

Dispute with the information furnisher

When appropriate, contact the lender, bank, landlord-related source or other company that supplied the incorrect information.

Include evidence

Provide statements, receipts, account letters, court records or other documentation supporting your position.

Keep copies

Save the original report, dispute and investigation result.

Related guides:

What if the Account or Record Is Not Yours?

An unfamiliar account may indicate:

  • Identity theft
  • A mixed file
  • A data-entry error
  • A record belonging to someone with a similar name

Do not automatically accept or pay an unfamiliar debt simply because it appears in a consumer report.

Investigate:

  • The account number
  • The opening date
  • The business that supplied it
  • The address connected with it
  • Other identifying information

If identity theft appears likely:

  • Contact the affected company.
  • Dispute the fraudulent report information.
  • Use IdentityTheft.gov when appropriate.
  • Review your other consumer reports.
  • Consider security freezes.

See:

Free Identity Theft Report and Recovery Plan

Should You Reapply Immediately?

Usually it is better to understand the denial first.

If the problem is:

  • An inaccurate report
  • An identity-theft account
  • A bank-account reporting error
  • An incorrect tenant-screening record

reapplying immediately may simply produce another denial based on the same information.

Identify the report, correct genuine errors and understand the decision before submitting multiple new applications.

What if a Credit Score Was Used?

For certain credit adverse actions, the notice may also include:

  • The credit score used
  • The range of possible scores
  • Key factors adversely affecting the score
  • The source of the score

A score itself is not the same thing as the underlying consumer report.

For example:

  • The report may contain a high balance.
  • The scoring model evaluates that balance.
  • The lender uses the resulting score in its decision.

Review the underlying report when a score contributed to the denial. Correcting inaccurate report information is more important than simply arguing with the number.

Consumer Report vs Actual Denial Reason

There are two separate questions:

Question Example answer
Which company supplied the report? Experian
Why was the application denied? High revolving balances
Which company supplied the bank report? ChexSystems
Why was the account denied? Unpaid balance from prior account closure
Which company supplied the rental report? Tenant-screening company
Why was the apartment denied? Reported eviction record

The consumer reporting company tells you where the information came from. The adverse-action reason tells you what influenced the decision.

Step-by-Step Plan After an Application Denial

1. Save the denial notice

Do not delete or discard it.

2. Find the adverse action section

Look for the consumer reporting company name.

3. Identify the stated reasons

For credit decisions, review the reasons or instructions for obtaining them.

4. Request the exact report

Use the reporting company identified in the notice.

5. Request it promptly

The adverse-action free-report right generally has a 60-day request period.

6. Review the report

Compare it with your actual accounts and history.

7. Dispute genuine errors

Contact the reporting company and information source as appropriate.

8. Investigate unfamiliar records

Look for identity theft or mixed-file problems.

9. Review the corrected report

Confirm that any successful correction actually appears.

10. Decide whether to reapply

Do so after understanding the original denial rather than applying blindly.

Mistakes to Avoid

Checking Only the Big Three Credit Bureaus

A bank, landlord, insurer or employer may have used a specialty consumer report instead.

Guessing Which Report Was Used

Start with the adverse action notice.

Waiting Longer Than 60 Days

Request the free adverse-action report promptly.

Assuming the Reporting Company Denied You

The business receiving the report made the actual decision.

Confusing the Report Provider With the Denial Reason

“TransUnion” is a report provider; “too many recent inquiries” could be a denial reason.

Buying Random Reports Online

Identify the exact company used before spending money.

Ignoring Specialty Consumer Reports

Checking-account and tenant-screening reports can be critical even when your credit reports look excellent.

Disputing Accurate Information Just Because It Is Negative

Focus on information that is inaccurate, incomplete or belongs to another consumer.

Submitting Multiple Applications Immediately

Understand the reason first so you do not repeat the same problem.

Frequently Asked Questions

How do I find out which consumer report caused my application denial?

Read the adverse action notice sent by the lender, landlord, bank, insurer or other business. If the decision was based in whole or in part on a consumer report, the notice generally should identify the consumer reporting company that supplied the report and provide its contact information. Use that exact company name to request the report. Do not assume the business used Equifax, Experian or TransUnion because specialty reports are common for bank accounts, rental housing, insurance and employment decisions.

Can I get the report for free after being denied?

Yes, in many adverse-action situations. Under the Fair Credit Reporting Act, if a business took adverse action based on information in a consumer report, you generally have the right to request a free copy from the reporting company identified in the notice. For many types of adverse action, you must request the free report within 60 days after receiving the notice. Contact the specific reporting company listed rather than ordering a different report that may not have been involved.

How long do I have to request the free report after a denial?

The usual Fair Credit Reporting Act adverse-action period is 60 days after you receive the notice. That is different from your separate right to obtain certain consumer reports periodically for free. Save the denial notice and request the adverse-action report promptly so you can review the same type of information that was available around the time of the decision. If you wait too long, you may lose the special free-copy right tied to that particular adverse action.

Which report could cause a checking account denial?

Banks and credit unions may use specialty checking-account reporting companies rather than—or in addition to—traditional credit bureaus. The CFPB lists companies such as ChexSystems, Early Warning Services, Certegy, TeleCheck, CrossCheck and Global Payment Check Services. Reports can contain information about prior checking accounts, closures, unpaid negative balances, returned checks or suspected fraud. The bank's adverse action notice should identify the reporting company actually used, so check that notice before requesting reports at random.

Which report could cause an apartment application denial?

A landlord may use a tenant-screening report that includes credit information, rental history, eviction records, public-record information or identity data. Tenant-screening companies are separate from the three nationwide credit bureaus, although some reports may also incorporate credit information. If the landlord denies the application because of a tenant-screening report, the adverse action notice should identify the company that supplied it and explain your right to request a free copy within 60 days.

Which credit bureau caused my auto loan denial?

The adverse action notice should tell you which consumer reporting company supplied the credit report used in the decision when the denial was based on a report. The lender may have used Equifax, Experian, TransUnion or another source, and some lenders use more than one source. Do not rely on which bureau another dealership or lender used in the past. Request the report from the company identified in the notice and compare it with the lender's stated reasons for denying the application.

Did the consumer reporting company decide to deny my application?

No. The reporting company supplied information to the business, but the lender, landlord, bank, insurer or employer made the actual decision. Federal adverse-action notices specifically explain that the consumer reporting agency did not make the decision and cannot provide the specific reason the business rejected your application. The reporting company can show you what information appears in your file and investigate inaccuracies. The business that denied you is the one to ask for the decision reasons.

What if my denial notice does not identify a consumer reporting company?

Contact the business and ask whether a consumer report was used in making the decision. The denial may have resulted entirely from application information or internal criteria, but if an FCRA consumer report contributed to the adverse action, disclosure requirements may apply. Ask for another copy of the adverse action notice and the name of every consumer reporting company involved. Do not assume that no report was used simply because the first email or letter you received is vague.

What should I do if the report that caused my denial is wrong?

Identify the specific inaccurate or incomplete information and dispute it with the consumer reporting company. When appropriate, also dispute the information directly with the bank, lender or other company that supplied it. Include documentation supporting the correction and keep copies of the original report, dispute and investigation result. If the information appears to belong to someone else, investigate possible identity theft or a mixed-file problem. Correcting the source of the error can be important so the same information is not reported again later.

Should I apply somewhere else immediately after being denied?

Usually it is better to understand the first denial before submitting many new applications. If an inaccurate consumer report, identity-theft account, bank-account screening record or incorrect tenant record caused the problem, another business may see the same information. Request the report identified in the adverse action notice, determine whether the information is accurate and correct genuine errors first. Once you understand the reason, you can make a more informed decision about whether and where to apply again.

Official Resources

Bottom Line

If an application was denied because of information in a consumer report, do not guess which report caused the problem. Start with the adverse action notice.

The notice generally should identify the consumer reporting company that supplied the report and explain your right to request a free copy. For many adverse-action reports, make the request within 60 days.

The correct report could be a traditional Equifax, Experian or TransUnion credit report, but it might instead be a specialty report from ChexSystems, Early Warning Services, LexisNexis, a tenant-screening company or another consumer reporting agency.

Once you obtain the report, compare it with the stated reason for denial. If the information is accurate, you know what issue influenced the decision. If it is inaccurate, incomplete or belongs to someone else, use the dispute process before repeatedly submitting new applications.

The practical rule: the adverse action notice tells you where to look. Identify the reporting company, request the exact report and investigate the information before applying again.

Charge Decoded provides general U.S. consumer information and does not provide individualized legal, credit, housing, employment, insurance or financial advice. Adverse-action requirements and consumer-report rights can vary depending on the type of decision and applicable law.