You were approved — on worse terms. There is a notice for that.

Denials get attention. The much more common outcome of a damaged credit report is approval on worse terms, and people rarely connect a higher rate to anything they could look into.

There is a notice specifically for that situation.

The rule

15 U.S.C. § 1681m(h) applies where a creditor, using a consumer report, extends credit on

material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers

from or through that creditor, based on the report. The creditor must provide a risk-based pricing notice, which may be given at the time of application or at the time the approval is communicated.

What it must contain

At minimum:

• A statement that the terms offered are set based on information from a consumer report.
• The identity of the consumer reporting agency that furnished it.
• A statement that you may obtain a free copy of your report.
• Contact information for getting it.
• The numerical credit score used, if one was used, with the information described in § 1681g(f)(1).

So the notice tells you which agency’s file drove the price, and entitles you to see it.

The exceptions

No notice is required where:

1. You applied for specific material terms and were granted those terms — with a carve-out where the creditor itself specified those terms after you initiated the transaction and after it obtained the report; or
2. The creditor provides an adverse action notice under § 1681m(a) instead.

That second one matters: a creditor that gives you an adverse action notice is not separately obliged to give you a risk-based pricing notice. The statute also provides that a creditor relying on subsection (a) cannot use that notice to satisfy subsection (h)’s requirements.

There is also a credit-score-disclosure alternative in practice, under which creditors provide score disclosures to applicants generally rather than identifying who received worse terms. If you have ever received a credit score disclosure with a loan you were approved for, that is likely what you were looking at.

Why it is worth noticing

Worse terms cost more than denials. A denial is obvious and you go elsewhere. A rate two points higher over thirty years is a large number nobody experiences as an event.

It identifies the agency. Like an adverse action notice, it names which agency’s file was used — which tells you which file to request and dispute.

It comes with a free report. Take it. And if you are inside 60 days of an adverse action notice, § 1681j(b) gives you another free one on that basis. See the free reports almost nobody claims.

The score factors are a map. The information under § 1681g(f)(1) includes the key factors that adversely affected the score. That points at what the model reacted to, which points at where to look in the file. See your score is not your file.

What to do with one

1. Keep it, dated, with the envelope.
2. Note the agency it names.
3. Get the free report from that agency, and ask for the full file disclosure under § 1681g — not a score product.
4. Read it for errors, section by section. See how to read a credit report.
5. If something is wrong, dispute it — and if the pricing was driven by an error, that is also the beginning of a record about what the error cost. See building a record that holds up.

What we are not saying

We are not saying worse terms mean your report is wrong. Risk-based pricing is lawful and ordinary, and a lender is entitled to price accurately on an accurate record.

We are also not telling you whether any creditor complied, or what follows if it did not.

What is general: there is a notice for being approved on worse terms, it names the agency, it comes with a free report, and it is the only signal many people ever get that their file is affecting them.