Thus, because many of the other factors that underwriters consider in evaluating loan applications are considered at this prequalification stage, if most prospective applicants are prescreened one would expect to see credit history as the predominant reason for credit denial
. The regulations that implement HMDA provide lenders with an opportunity to report the reasons for credit denial
, and an assessment of these data confirms that by far the most frequently cited reason for credit denial
is credit history.
The 1990 HMDA data make clear that credit history was the single most commonly cited reason for credit denial
for whites, African Americans, and Hispanics.
(9.) Under HMDA, lenders may report the reasons for credit denials
: Lenders most frequently cited applicants' credit history problems and excessive debt levels relative to income.
The HMDA reports reveal that credit history problems and excessive debt levels relative to income are the reasons most frequently given for credit denials
. But specific information for applicants--on their level of debt, debt repayment record, employment experience, and other factors pertinent to an assessment of credit risk--is not available from the HMDA data.
* The geographic distribution of the institution's credit extensions, credit applications, and credit denials