We have an application for an unsecured loan that the loan officer would like to deny because the co-signer, who has a mortgage with us, is past due on their real estate taxes. A credit report was pulled, but it did not contain any information about the past due real estate taxes, so information obtained from the credit report is not being used to deny the loan. The loan officer discovered the past due real estate taxes via the tax assessor’s website.
I’m thinking that the reason listed on the adverse action notice should be “delinquent past or present credit obligations with others†as this seems to be an accurate description of the reason the loan request is being denied. On adverse action reason charts, the explanation of when to use this reason contains the verbiage “when the credit report reflects late payments to creditors other than our financial institution.†Would “delinquent past or present credit obligations with others†be an appropriate reason if the information was not obtained from a credit report?
Since the credit decision is based on information obtained from an outside source other than a credit reporting agency, would we simply check the box that discloses this information on the adverse action notice and omit the credit score since the credit score was not used in making our credit decision?