We have an business application in an LLC name. We pulled the guarantor’s credit report. We are denying the LLC because itself (these loans have the same guarantor but do not show up on the individuals credit report)) has/have had past due payments with our bank (Poor Credit Performance With Us). When sending out the adverse action we would put the APPLICANT as the LLC and not the guarantor. Since we did order a credit report on the guarantor. Do we include the guarantor’s credit score information on the second page of the adverse action?
You have asked a very reasonable question, but the answer gets complicated.
The information about the credit score is contained in Part II of the adverse action form. That section is governed by the Fair Credit Reporting Act (FCRA). The first checkbox in Part II is required by Section 615(a)(1) if a credit report is obtained and if the credit decision is based in whole or in part on information obtained in the report. According to the information you provided Section 615 (a)(1) is not needed since the credit decision was not based on the information in the report.