Credit glossary
Adverse action notice
The letter a lender, landlord, insurer or employer must send when your credit report helped lead to a denial or worse terms.
Under the FCRA (15 U.S.C. 1681m), the notice has to name the bureau that supplied the report, tell you that you can get a free copy from it within 60 days, and disclose the score used along with the key factors that hurt it. Regulation B, which carries out the Equal Credit Opportunity Act, adds a separate duty for creditors: give the specific reasons for the decision, or tell you how to ask for them.
Treat the letter as a free diagnostic. The bureau it names tells you which file to pull, and the reasons tell you whether the problem was the score or something else, like income or debt-to-income. A denial for excessive obligations calls for a different fix than one blaming a recent late payment. If the report behind the decision contains an error, the notice is your starting point for a dispute.
Guides that go deeper
- Adverse action notices: how to read the letter and use itA denial letter must name the bureau, shows the score used if there was one, and opens a 60-day window for a free report. How to read and use each part.
- Credit score reason codes, decoded: what each one is telling youReason codes list what held your score back the most, in order. What the common ones mean, which you can act on, and which to leave alone.
Sources
- 15 U.S. Code 1681m, Requirements on users of consumer reports, Legal Information Institute, Cornell Law School
- 12 CFR 1002.9, Notifications (Regulation B), Consumer Financial Protection Bureau
- 15 U.S.C. 1681j: Charges for certain disclosures, Legal Information Institute, Cornell Law School
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