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Credit Report Adverse Action Letter

credit report adverse action letter notifies individuals that underwent credit screening that they were not accepted due to the results of the consumer report. It is required by law that consumers are informed following any adverse action against them, per the Fair Credit Reporting Act (FCRA). The notice informs the applicant of their rights, which includes their access to a free credit report so long they request it within sixty (60) days of their rejection. Prior to the adverse action report, the sending entity will often deliver a pre-adverse action notice. This provides the recipient with ample time to correct any issues in the credit report to obtain reports are often issued when

What is a Credit Report?

A credit report is a collection of one’s financial history, focusing on one’s track record of how they handled previous debt obligations. It is used by entities to determine if they can take on the risk of trusting a person with paying for rent, utility bills, and loan payments (to name a few). There are three (3) main credit reporting agencies:

  1. Experian
  2. Equifax
  3. Transunion

Who Can Pull a Credit Report?

Any entity can gain access to a person’s credit report if they have a justifiable reason for doing so. Entities that are known for using consumer credit reports include:

  • Creditors;
  • Student loan providers;
  • Financial institutions (banks);
  • Property managers (landlords); and
  • Utility providers.

What’s Included?

Information contained in credit reports is often categorized into groups, including:

  • Accounts (most important) – Any money that is currently borrowed is included here. Credit card debt, mortgages, auto loans, student loans, and so on. This also contains information on the terms of each debt and if the debtor has made timely payments.
  • Public records – This includes information that is available to the public via the court system, namely bankruptcies and debts that have been sent into collections.
  • Personal info – The name, address, phone number, birth date, employers, and SSN of the person being screened is available on the report.
  • Recent inquiries – The number of hard credit inquiries (and when they took place) from the past two (2) years are displayed on the report.