What’s an adverse action notice?

If you decide to deny an applicant’s rental application due to information you receive from a consumer report (also known as a credit, criminal or eviction report), you are legally obligated to provide notice / letter (an adverse action notice) explaining why. If you don't, you are in danger of violating laws regarding the use of credit reports, including the Fair Credit Reporting Act.

  • contact information relating to the consumer reporting agencies’ providing such information, so that an applicant can obtain a free copy of the consumer report used to make a decision; 
  • a statement declaring the agency supplying the report did not make the decision to take adverse action and cannot give the specific reasons for it; and
  • information on the applicant’s rights to dispute the accuracy of the information obtained by the consumer reporting agency and a consumer can receive a free report from the agency upon request within 60 days.

It’s best to provide the letter in writing, but whether you send it electronically via email or mail a physical copy, make sure to keep a dated copy as a record.

For more information on the FCRA and Adverse Actions Notice, visit the Consumer Financial Protection Bureau's (CFPB) website.