An adverse action notice explains an unfavorable decision, such as a credit denial or less favorable terms. Depending on the decision and information used, it can identify the reasons, the consumer reporting company involved, and rights to obtain and dispute the report.
The practical meaning.
The notice is a map to the exact decision, report source, and next step. Generic score advice is less useful until you know which company, report, date, and stated reasons affected the decision.
In a letter, email, or online notice after denied credit, less favorable terms, or another covered decision involving a consumer report.
Keep every page, the envelope or delivery email, and any score or reason-factor disclosures.
The company that made the decision is different from the consumer reporting company that supplied a report.
A reporting company does not make the lender’s approval decision.
- When adverse action is based on a consumer report, the notice explains a right to request a free copy from the named reporting company within 60 days.
- Creditors generally must provide specific principal reasons or explain how to request them; follow the timing stated in the notice.
