Skip to content
BOL Conferences
Thread Options
#2162229 - 01/29/18 03:39 PM Denial & No credit scores
LM Offline
New Poster
Joined: Mar 2017
Posts: 14
What should be listed for the credit score and the key factors on the AAN when the borrower does not have a credit score and the denial reason is no credit?

Return to Top
#2162230 - 01/29/18 03:41 PM Re: Denial & No credit scores LM
raitchjay Online
Power Poster
Joined: Oct 2009
Posts: 9,088
OK
You'd leave that part blank if they didn't have a score. You can't say "here is your score and the factors that affected your score" when there is no score.
_________________________
I'm fixin' to fix that.

Return to Top
#2203232 - 01/16/19 10:55 PM Re: Denial & No credit scores raitchjay
travelgirl1 Offline
Member
Joined: Sep 2015
Posts: 92
So do we not list any credit bureau information at all - such as the bureau name, address & phone? If we have to list the name, address, etc, our forms vendor puts the credit score line and key factors but leaves them blank. Isn't that confusing then? Here is your credit score and a blank line....

Return to Top
#2203253 - 01/17/19 01:18 PM Re: Denial & No credit scores LM
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
Well, there are two FCRA sections on the AA Notice. You still have to provide the CRA information where they can obtain a copy of their report, but the credit score information section (score, factors, date, range, ect) isn't required since the score wasn't used in making a credit decision. That said, I've seen quite a few financial institutions that tell the applicant that the score is not available - which helps avoid the confusion you reference - though you aren't required to do so.

From the Reg B final rule (July 15, 2011):

"Disclosure that no credit score is available. In some cases, a creditor may try to obtain a credit score for an applicant, but the applicant may have insufficient credit history for the consumer reporting agency to generate a credit score. One commenter asked that the creditor have the option to provide the applicant notice that no credit score was available from a consumer reporting agency in the space available for the credit information disclosure.

Section 1100F only applies when a creditor uses a credit score in taking adverse action. The creditor cannot disclose credit score information if an applicant has no credit score. Nothing in section 1100F of the Dodd-Frank Act prevents a creditor, however, from providing the applicant notice that no credit score was available from a consumer reporting agency, although section 1100F does not require such notice."
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top
#2203351 - 01/17/19 10:09 PM Re: Denial & No credit scores Adam Witmer
travelgirl1 Offline
Member
Joined: Sep 2015
Posts: 92
Thanks Adam. This makes a lot more sense now. Maybe just not thinking clearly with HMDA and CRA scrubbing going on and BSA and Compliance exams back to back starting April 1st. Fun times!

Return to Top
#2203443 - 01/18/19 05:49 PM Re: Denial & No credit scores LM
kbaird Offline
Junior Member
Joined: Dec 2015
Posts: 35
Adding on to the question above...in the scenario where there is no credit score available from the CRA and the loan is to be secured by "1-4 units of residential property", is the Notice to Home Loan Applicant still required?

Return to Top
#2203446 - 01/18/19 05:56 PM Re: Denial & No credit scores LM
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
No, the Notice to Home Loan Applicant isn't required if there isn't a score. That said, model form H-5 (exception notice) can be used when there isn't a credit score.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top
#2203449 - 01/18/19 06:01 PM Re: Denial & No credit scores Adam Witmer
travelgirl1 Offline
Member
Joined: Sep 2015
Posts: 92
great add-on question. Thanks you two.

Return to Top
#2203450 - 01/18/19 06:04 PM Re: Denial & No credit scores LM
kbaird Offline
Junior Member
Joined: Dec 2015
Posts: 35
Thanks, Adam!

Return to Top