With such a frightening name, it can be alarming to receive an adverse action notice in the mail, especially if you aren’t expecting it. Under the Fair Credit Reporting Act (FCRA), potential lenders are required to provide you with an adverse action notice when they deny you credit based on information in your credit report.
If you recently applied for a new credit card, loan, or other financial product, and were denied, there’s a good chance you found out the result of your application before an adverse action notice showed up in your mailbox.
According to the FTC, under the FCRA adverse action notices must include the following information:
- The name, address and phone number of the consumer reporting agency that supplied the report
- A statement that the consumer reporting agency didn’t make the adverse decision and can’t explain why the decision was made.
- Notice of your right to a free copy of your credit report from the consumer reporting agency if you ask for it within 60 days.
- Notice of your right to dispute the accuracy or completeness of any information provided by the consumer reporting agency.
- Your credit score(s), if the score(s) was used to evaluate your application for credit.
Even though it may sound scary, an adverse action notice aims to provide transparency into the application process and informs you of your rights if you think your application was incorrectly denied.
Learn more here: What is an adverse action notice?
I received an adverse action notice but I didn’t apply for anything
Intuit Credit Karma provides you with a mix of offers for financial products. You can also opt in to use Credit Karma to send additional information about yourself to lending companies to check for personalized personal loan offers. When you sign up to check rates for personal loans on Credit Karma, you allow the participating lenders to perform soft inquiries to identify available offers. Soft inquiries, unlike hard inquiries, do not affect your credit score.
Lenders sometimes send you an Adverse Action Notice when they are unable to present any offers after you share additional information with them. Lenders often standardize these documents, so it might say you applied for something even if you didn’t. If you receive an Adverse Action Notice, it doesn’t necessarily mean you also receive a hard credit inquiry. The notice may simply mean that the lender was unable to provide a personalized offer to you. The notice itself is not reflected on your credit report and doesn’t impact your credit score.
If you believe that someone may have applied for credit using your information, you should review your credit reports and check for hard inquiries or accounts you don’t recognize. Credit Karma provides free access to your Vantage 3.0 credit scores from:
If you find incorrect information on your credit reports, then you can dispute the inaccurate information. See more on how to do this in the articles below:
- How do I dispute incorrect information on my TransUnion credit report?
- How do I dispute incorrect information on my Equifax credit report?
You can also consider locking or freezing your credit reports from the three major consumer credit bureaus if you believe you are at risk for identity theft. Learn more here: Can I lock my credit with Credit Karma?