What Is an Adverse Action Notice? What It Means for Renters

The short answer

If a landlord denies you based on a screening report, they must send an adverse action notice under the FCRA. Learn what it includes, your rights, and how to respond.

If a landlord denies your rental application, they may be legally required to give you an "adverse action notice." Many renters receive these without knowing what they mean or what rights they trigger. Here is everything you need to know.

What Is an Adverse Action Notice?

An adverse action notice is a formal communication from a landlord, property manager, or lender explaining that they have taken an unfavorable action against you — typically a denial — based in whole or in part on information in a consumer report (credit report, background check, tenant screening report).

This right is established by the Fair Credit Reporting Act (FCRA), a federal law.

When Is an Adverse Action Notice Required?

A landlord must provide an adverse action notice when they:

• Deny your rental application based on a credit report or screening report
• Require a co-signer or guarantor based on screening results
• Charge a higher security deposit than standard based on screening results
• Offer different terms (shorter lease, etc.) based on screening results

If any screening report influenced the landlord's decision, the adverse action notice is required.

What Must an Adverse Action Notice Include?

A proper adverse action notice must contain:

• The name, address, and phone number of the consumer reporting agency that provided the report
• A statement that the reporting agency did not make the decision and cannot explain why
• Notice that you have the right to a free copy of the report within 60 days
• Notice that you have the right to dispute the accuracy of the report

What to Do After Receiving an Adverse Action Notice

Step 1: Get Your Free Report

Contact the consumer reporting agency named in the notice and request your free copy. You have 60 days from receiving the notice to do this.

Step 2: Review for Errors

Carefully review the report for any inaccurate information — evictions that were dismissed, wrong address history, records belonging to someone else, outdated items.

Step 3: Dispute Errors (If Any)

If you find errors, dispute them directly with the reporting agency in writing. They must investigate within 30 days. For more on this process, see our guide to disputing tenant screening errors.

Step 4: Understand What Caused the Denial

The adverse action notice does not have to specify which item in the report caused the denial. But you can review the report and make educated guesses. Common causes:

• Low credit score (below landlord's threshold)
• Eviction record
• Collection accounts or unpaid debts
• Criminal background item
• Insufficient income (often the real reason, even when a credit report is referenced)

What If You Did Not Receive an Adverse Action Notice?

If a landlord denies you based on a screening report and does not send an adverse action notice, they have violated the FCRA. You can:

• Contact the landlord and request the notice directly
• File a complaint with the Consumer Financial Protection Bureau (CFPB)
• File a complaint with the FTC
• Consult a consumer protection attorney — FCRA violations can result in statutory damages of $100–$1,000 per violation

Can You Appeal a Rental Denial?

Landlords are not legally required to reconsider a denial. However:

• If the denial was based on an error in the screening report, correcting the error through the dispute process can change the outcome
• You can contact the landlord to offer mitigating information (larger deposit, co-signer, additional income documentation)
• In some jurisdictions, you may have fair housing claims if the denial was discriminatory

How to Avoid Screening-Based Denials

The best approach is to know what is on your report before you apply:

1. Pull your own credit report at AnnualCreditReport.com
2. Request your tenant screening file from TransUnion and Experian RentBureau
3. Dispute any errors before you begin your apartment search
4. Get pre-verified with Settl — a Settl Verified Passport uses TransUnion credit data and CIC court records via Stitch Credit — FCRA dispute rights apply, and if you believe there is an error in your Settl report, contact us at [email protected]

Start your Settl verification today.

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