Credit denial letter must go along the requirements which can be used as plans of contents that the letter contains. From these guidelines, one can get a complete idea about the rules and regulations given by the seller. Sometimes banks write these letters in aid of the purchaser to the seller as the bank acts as a representative of the buyer. The denial of credit requires that the lender informs the applicant in writing of the specific reasons for denial within 30 days and that the rejected applicants be provided with the opportunity to obtain a free copy of their credit report.
Usually, credit denial letters are given as a result of the borrower’s perceived inability to pay back the loan. This is often due to previous faults on the borrower’s credit history, but it can also stem from an incomplete credit application or lack of any borrowing history. These letters are given to the borrower when their payment credit is canceled due to the failure of paying back the money they have taken before.
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Credit Denial Letters Writing Tips
- Write this letter in polite language. Express your sorry as you cannot lend a credit.
- Positively write the letter; tell the reader what he can do to improve the situation to be eligible for receiving the credit.
- Write the letter in a way that the reader can understand the reason for denying the credit, use appropriate words that make the letter polite and formal.
- Write this letter in very simple language. Do not use very professional language.
Credit Denial Letters Template
Use our free Credit Denial Letters to help you get started.
From (Sender’s name and address)
Date (Date on which the letter is written)
To (Receiver’s name and address)
Subject – _________(mention the purpose)
We are writing this letter to tell you that we are not in a position to get you to accredit. We feel sorry about this. Your income is not up to our limits, and hence we are not able to lend credibility to you. There is no person to take your warranty, and also your record shows many late payments. This is the reason why we cannot help you with credit. If you try to improve your credit situation then surely you have a chance to get credit. Hope you do not have any misunderstandings and we wish you all the best for your future. We hope you come out of this situation soon.
134 Rue Galboun Ibn Al Hassan
1160 CHAALIL NORD
Casa Posrclas 99
Subject – Letter for Denial of Credit
This is concerning the application that we received from you on 20.09.2013. The application was regarding taking a bank credit. We regret to inform you that we are not able to provide your credit due to some matters. We have set criteria concerning income standards, and unfortunately, you do not meet those prescribed standards. We feel that you will not be able to make the payment because of your low income. We have a certain list of companies, to provide the credit and we didn’t find your name in the list. As a result, we cannot do the verification process either. You have most times made late payments, and have been charged a late fee for that too. Aside from all these circumstances, no one can take your guarantee. Therefore we have to deny your request. We hope you do not have any misconceptions about us in regards to this issue.
Credit denial letters should be formal and should be written professionally. These letters should be humble, and there should be a valid reason for the refusal of the credit applied by the applicant. Following is a sample email for a Credit Denial Letter:
Subject: Denial of the loan request
Dear, Mr. Antonio
We received your application letter dated 20th September 2010 requesting credit from our bank. It is my painful duty to inform you that we cannot lend you credit because of certain issues which we considered while reviewing your case. For taking credit, we have fixed income criteria but your income does not meet the base, and we feel that you will not be able to make the payments due to low income. Your company does not come under our list of enterprises to provide the credit thus verification is not possible.
Moreover, you have often cleared your payments late of which late fee has been charged to you each time. Apart from all these no one will give you reference and take your guarantee. Hence please excuse us in this respect and try to work on the issues to get eligible for taking credit.
Ms. Teresa F. Brown
ABC Cooperative Bank Pvt. Ltd
4641 Wexford Way
Rock Hill, SC 29730