What Is an Adverse Action Notice?

What Is an Adverse Action Notice?


An adverse action notice, simply speaking, is a notice in pdf typically issued to inform an individual that his/her request or application for credit, employment, benefits, or insurance has been denied based on the information found on his/her consumer report or credit report.

An adverse action notice contain information explaining why such individual was denied of his/her application, and other important details regarding the decline. Such sample notice is an essential procedure because an individual deserves to know that his/her request has been denied, among other  things.

When to Issue an Adverse Action Notice

According to the Equal Credit Opportunity Act (ECOA), and the Fair Credit Reporting Act (FCRA), there are different instances when an adverse action notice needs to be provided. Here are some of such instances:

  • Applicant is denied of credit.
  • No submission of credit for approval has been made.
  • Terms requested for credit is not granted.
  • Applicant submits an incomplete credit application sample.
  • Creditor makes a counteroffer to the applicant, which the applicant does not accept or consider.
  • Credit is denied based on certain information included in a consumer report.
  • Credit is denied based on a third party other than consumer or credit reporting institutions.

Like other notices, depending on a person’s geographical area, the laws and specific instances when one can issue a adverse action notice might differ. One must follow the laws regarding the issuance of adverse action notices as stated on the laws of the area where he/she belongs.

What to Include in an Adverse Action Notice

Adverse action notice is intended to carry different information which if summed up would mean that an individual’s credit, employment notice, or insurance application has been denied. An adverse action notice typically contains the following information:

  • Statement in pdf informing about the decline of the application.
  • Name, address, and contact information of the agency which provided the consumer or credit report.
  • Statement declaring that the consumer or credit reporting agency has not in one way or another influenced the decision to decline the application, and thus cannot provide the reason as to why such action was taken.
  • Statement notifying the applicant that he/she has the right to obtain a free copy of the consumer or credit report from the agency who provided the report.
  • Statement explaining that the applicant may question the accuracy or completeness of the information included in the consumer or credit report.

Things to Remember when Writing an Adverse Action Notice

If you have decided to deny an application example for credit, insurance, or benefits, you need to learn how to write an adverse action notice. Here are some things which you might find useful when writing an adverse action notice:

  • Have a purpose in writing an adverse action notice.
  • Carefully consider the information to include.
  • Input all information in a clear, concise and understandable manner.
  • Make sure the information you included is accurate and complete.
  • Maintain a formal and professional tone.
  • Keep your information organized.
  • If your notice is computer generated, review before sending it to the applicant.
  • Keep a copyright of the notice for record keeping.