Adverse Action Notice

An adverse action notice is a required communication sent when a rental decision is unfavorable to an applicant because of information in a consumer report, such as a credit, criminal, eviction, or background screening report. In multifamily operations, this can apply to a denial, a conditional approval, a higher deposit, a co-signer requirement, or another less favorable term. The notice explains that a consumer report influenced the decision and helps the applicant understand their rights to review and dispute inaccurate information.

A leasing team reviews an applicant’s screening report and denies the application based on documented criteria. The team records the reason code in the system of record and sends a compliant adverse action notice within the decision-communication workflow.

Adverse action notices help operators follow Fair Credit Reporting Act requirements, document screening decisions, and reduce compliance risk. They also create a clear, consistent process for applicants by explaining when consumer report information affected the outcome and how the applicant can respond if the report is inaccurate.