Business loan denied because of Owner's Report

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Question:

We have a business entity request for commercial credit and a credit report was pulled on the two owners, with the credit request denied based on one owner's credit score. If the FCRA portion of the Adverse Action Notice is completed is that wrong? If this is included and the score, key factors etc. are for the credit score used in making the credit decision is sent to both owners, in the name of the business entity, is that wrong?

Answer:

Sounds like either you were basing the loan underwriting on the strength of the owners or maybe going to require the owners to guarantee the loan. In either case, the individuals are not the credit applicant and would not receive any sort of adverse action notice personally. The entity applicant is being denied and not the individuals. If you do not require the owner to guarantee the loan, then you would have needed written permission to pull their individual credit reports.