Credit Denial Letter

Credit denial letters are credit institutions' response to a consumer's credit request application, which states that they have been denied a credit due to a number of reasons depending upon their credit history. Due to the ever increasing volume of credit applications today, it is important for a credit institution to refer to a customer's credit report before offering a credit. A credit denial letter must clearly state, why the customer has been denied a credit. It is certainly a legal document that the consumers may use in order to dispute with their credit reporting agency, and hence should be written very carefully, on the company's letterhead.

Begin your letter by acknowledging the customer's interest in applying for a credit, and then politely inform the customer about the denial of credit. There are times when certain information in one's credit report needs to be added or rectified, so it is advisable for you to keep the doors open in case the customer applies for a credit again, with a rectified credit history. When writing a credit denial letter, it is also a good practice to suggest useful measures for the customers that they may refer to, in order to clear the hurdles in getting a credit.

Your credit denial letter must sound courteous as you are about to inform the customer about the refusal of his credit request. It is necessary to keep your letter straightforward, brief, clear and precise. Also inform him/her that they are free to apply for a credit in future.

Always let the customer know that he/she may file a dispute with their credit reporting agency in case they feel that there are any flaws in their credit report, although as a credit company you cannot be asked to get in touch with them by the customer in order to resolve the problem.

Below, we have provided two samples of credit denial letter for your reference.

Credit Denial Letter Sample 1

Dixon Credit Co
1309 West 15th Street
Plano, TX 75086-9105
(972) 596-5660/ 866-839-7484
creditenquiry@e-mail.com

Ref no: CR/00975
October 13th, 2011

Ms. Caroline Garner
2300 Kathryn Lane
Plano, Texas
Zip code - 75025

Dear Ms. Garner,

With regards to your recent credit application, we appreciate your interest in applying for a credit in our institution. Although we regret to inform you that we are currently unable to offer you a credit considering the following reasons:

• Your employment tenure does not meet the minimum requirement of 3 years, as set by the company's policies

• Your credit history does not show a steady income of $3000 per month

• Your credit report reveals irregular payments in the recent past

The above information is provided by Experian, P.O. Box 2002, Allen, TX 75013.

YOU MAY APPLY FOR A FREE COPY OF YOUR CREDIT REPORT FROM YOUR CREDIT REPORTING AGENCY WITHIN 45 DAYS UPON RECEIPT OF THIS LETTER. IF YOU FEEL THE NEED TO DISPUTE WITH YOUR CREDIT REPORTING AGENCY REGARDING ANY MISINFORMATION, INACCURACY OR LACK OF INFORMATION IN YOUR CREDIT REPORT, YOU HAVE THE RIGHT TO DO SO.

If you need to discuss the contents of this letter, feel free to call us at 866-849-7889

Yours faithfully,

Joseph Lord

Financial Analyst - Dixon Credit Co

Sample Credit Denial Letter 2

Reference No. Res/08/Cr-118

Standard Bank of Commerce
1402, Katella Avenue
Anaheim
California - 6413
United States
Tel: (888) 450 1203
Email: customercare@sbcbank.com

Date: 2nd November, 2011

Brian Smith
106 S, Wilshire Blvd
Beverly Hills
California - 6084
United States

Re: Credit Request

Dear Mr. Smith,

This is in reply to your letter dated October 28th, 2011 regarding the increase in the credit limit to the 'Platinum level'; we would like to inform you that currently we are not in a position to accept your request.

Though we regret to decline your request for the current term, it is recommended that you may apply for the same in the next financial quarter. Your request has been denied due to lack of guarantee from your employing organization, as you have not yet completed the mandatory 2 years of full time employment. This in turn has resulted in non availability of credit records on YOY (year on year) basis, as required by our bank policies.

We advise you to contact us on completion of the due term of employment. However, if you still want an increase in the credit limit, you need to provide us with a guarantor for the same. We would be eager to help you.

Thanking you for your interest and query.

Regards,

(Signature)

Bob Sebastian
Credit manager
Standard Bank of Commerce

The above example of credit denial letter will definitely guide you in writing a flawless credit denial letter. You may write it using your own words, but make sure you follow the layout of the sample provide. You can look at Credit Report Dispute Letter and Importer Credit Letter for more sample letters. Also, check out more Financial Analyst Cover Letter to get job in the field of finance.