There are two basic types of "denials" under the FCRA. One is for a complete denial of the credit, and the other is for a counter-offer for credit, but at substantially different terms than the better rate offered.
A complete denial of new credit or an unfavorable change in terms of existing credit is considered an "adverse action," and requires sending a notice of adverse action under FCRA 615(a), A counter-offer of terms less favorable than requested or generally available to a substantial portion of consumers requires the sending of a notice of risk-based pricing under FCRA 615(h). In my opinion, decline to grant a CLI would probably fall under neither, as it is not a denial of credit or an offer of credit for less favorable terms.
Both stipulate that if the creditor's decision was based in whole or in part on information obtained from your credit report, they must notify you of the name of the CRA whose CR they relied upon, and of your right to send their notice to that CRA within 90 days and request a free copy of your CR from that CRA. The creditor is not the party responsible for providing the free credit report.
The Supreme Court has ruled, in Safeco v. Burr, that the simple fact that they pulled your CR is not sufficient basis for requiring a notice of adverse action and thus receipt of a free credit report. It must be shown that they actually relied on the CR information as part of their decision-maling. In the case of a CLI, if the creditor's denial was based upon their own internal records, there would be no requirement to send either type of notice.
Neither type of notice requires any advisement of the right to a free credit score. However, if the lendor is a mortgage lendor, the additional provisions of section 809(g) may apply.
