What must a creditor provide a consumer when a credit application is denied?

When a credit application is denied, the creditor is required to provide a written notice to the consumer detailing the reasons for the denial. This obligation is in accordance with the Equal Credit Opportunity Act (ECOA), which mandates that consumers must be informed about their application status in a transparent manner. The written notice not only informs the consumer that their application was denied but also includes the specific reasons for this decision.

Providing this written communication ensures that the consumer understands what factors influenced the creditor's decision. It also allows individuals to address potential discrepancies in their credit reports or to work on improving their creditworthiness before applying again in the future. This practice helps maintain transparency in the lending process and protects consumers' rights.