False Declines: How and When They Happen

Why Are They Dangerous and Should Be Avoided

False decline is a term that refers to any decline in credit score that was not accurate. This means there are two types of false declines: authorize-only and inquiry-only. Approve-only false declines are misapplied by the creditor when they incorrectly report an account as closed or settled, while inquiry only false declines happen when a creditor reports your credit file with no balance owed or other information on it.

Both are dangerous because they are incorrect information. False declines can be caused by a number of factors, including identity theft. An identity thief can use your information to open new credit accounts or they may have already had your information and are just using it now, causing false declines on old debts that you never even incurred in the first place!

False Declines

Another example of a factor is if someone has stolen an account number or set up a fake profile with your name but their own identifying details, leading creditors to believe the debt belongs to them instead. Because this type of fraud is usually not detected by lenders for years after it occurs, victims often find themselves dealing with multiple late payments and delinquencies on their reports long after they’ve paid off any legitimate debts related to those transactions. This will lead consumers into serious financial difficulties because these records are considered when scoring consumer’s creditworthiness.

False declines can also be caused by simple clerical errors, such as a creditor entering the incorrect name or social security number associated with your file (we’ll talk more about this next). Or maybe one of your creditors reported their own set of wrong information and doesn’t even realize it! As you can see there are many different factors that would cause false decline credit score drops to occur and correcting any mistakes like these is important for protecting your financial future.