Adverse Action Notice

An adverse action notice, in paper form or transmitted electronically, informs a loan applicant that they have been denied credit based on information in a credit report. The notice should indicate which credit reporting agency was used, and how to contact the agency.

An adverse action notice is required under the Equal Credit Opportunity Act (ECOA), as implemented by Regulation B, and the Fair Credit Reporting Act (FCRA) reflecting Congress’s determination that consumers and businesses applying for credit should receive notice of the reasons a creditor took adverse action on the application or on an existing credit account.