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Adverse Action FICO???

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Leadberry
Established Contributor

Adverse Action FICO???

So when I got rejected by Discover I swear the adverse action letter stated my TU FICO was 603.  However, I just got an adverse action letter from NFCU stating a TU FICO of 664.  How accurate are the scores in these adverse action letters supposed to be?  I suppose it's possible I misread the first one...

   
FICO Scores 800+
Message 1 of 6
5 REPLIES 5
Johnny_Favorite
Regular Contributor

Re: Adverse Action FICO???

Wouldn't those be denial letters? I thought advsere action was when you have a card already and they shut you down or reduce your limit.

 

In any case, I have noticed that the scores in these letters are not very reliable because every company has a different scoring model. As an example: Walmart Discover rated me a 680 when I applied for them. Yet I applied for the regular DiscoverIT the next day and when that approval letter came in it had me at 760. I'm pretty sure every single card has its own specific scoring model tailored for the underwriting requirements of that specific card.

 

One card might weight inquiries high while another card might not rate inquiries at all if the score is above a certain threshold. Some cards depend highly on AAOA while others could care less.

 

 




Message 2 of 6
RobertEG
Legendary Contributor

Re: Adverse Action FICO???

FCRA 603k includes denial of credit, as opposed to an offer for credit at less favorable terms than generally available, as an "adverse action."

So, yes, they took an adverse action.

 

FCRA 615 then defines the requirements on the creditor and rights of the consumer upon taking of an adverse action.

They are required to inform you if they used a credit report in their determination, and advise you of your right to send a copy of their denial letter to the CRA within 90 days and receive a free copy of your credit report.  They are not required to provide the consumer a copy or to disclose the use of a credit score based on that report.

So questions regarding the score are not a part of their responsibility.

Message 3 of 6
Leadberry
Established Contributor

Re: Adverse Action FICO???

The one from Discover was a denial letter.  The one from NFCU was a letter indicating I didn't get the most favorable APR.  They're both still considered adverse action notices, as Robert said.

 

I only ask about them because the Discover one specifically said "TU FICO" whereas the NFCU one simply says "TransUnion Credit Score."  I'm waiting to get the hardcopy of the Discover denial letter in the mail to make sure I wasn't really seeing things.

   
FICO Scores 800+
Message 4 of 6
RobertEG
Legendary Contributor

Re: Adverse Action FICO???

Technically, a letter that offers less favorable terms is not an "adverse action" under the FCRA.

 

Such transactions are separately covered under FCRA 615(h)(3) and implementing regulations referred to as "risk-based pricing," where their counter-offer is for less favorable terms  based on some assessed risk on the part of the consumer.  Very different notice requirements on their part.

Message 5 of 6
Leadberry
Established Contributor

Re: Adverse Action FICO???

This was not a letter that offered less favorable terms.  This letter was merely a notice that the APR I received was higher than that awarded to other members, and that this was due to negative information contained in my credit report.  It then explained that "you have the right to receive your credit report to check for accuracy under blah blah blah..."

   
FICO Scores 800+
Message 6 of 6
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