FCRA Adverse Action Notices: What Landlords Must Tell Applicants
When a screening report leads you to deny an applicant or ask for more, the Fair Credit Reporting Act requires a notice. What it must say, with the statute.
By Seayora Editorial Team · Published · Facts checked · 3 min read
Short answer: If a credit report or tenant screening report leads you to deny an application, or to approve it only with a co-signer, a larger deposit or higher rent, the Fair Credit Reporting Act requires an adverse action notice. It must name the reporting company, say the company did not make the decision, and explain the applicant’s right to a free copy of the report within 60 days and to dispute it.
Key takeaways
- A rental application gives a landlord a permissible purpose to pull a consumer report.
- Approving on worse terms because of a report is adverse action, not only a denial.
- If a credit score was used, the notice must also disclose the score and its key factors.
- Willful violations carry statutory damages of $100 to $1,000 per person plus punitive damages and fees.
When can a landlord pull a report?
A consumer reporting agency may furnish a report to someone with “a legitimate business need for the information in connection with a business transaction that is initiated by the consumer” (15 U.S.C. § 1681b(a)(3)(F)), and a rental application is such a transaction. Tenant screening companies that compile credit, eviction and criminal records for landlords are consumer reporting agencies.
What counts as adverse action?
Denying the application is the obvious case. The Federal Trade Commission’s guidance for landlords also treats requiring a co-signer, requiring a deposit that would not be required of another applicant, or raising the rent as adverse action when a report was the reason (FTC: Using Consumer Reports). The trigger is that information in a report played a part, even if it was not the only reason.
What must the notice say?
Under 15 U.S.C. § 1681m(a), the notice can be oral, written or electronic, but written is the only kind you can prove. It must include:
- Notice of the adverse action itself.
- The name, address and telephone number of the consumer reporting agency, toll-free if it is a nationwide agency.
- A statement that the agency did not make the decision and cannot explain why it was made.
- The applicant’s right to a free copy of the report if they ask within 60 days (15 U.S.C. § 1681j).
- The applicant’s right to dispute the accuracy or completeness of anything in the report with the agency (15 U.S.C. § 1681i).
- If a credit score was used: the score, its range, up to four key factors that hurt it, the date it was created and who provided it.
What if the information did not come from a report?
If you deny or raise the cost of housing because of information from someone other than a consumer reporting agency, such as a previous landlord or an employer you called yourself, the applicant has the right to ask, within 60 days, for the nature of that information, and you must tell them about that right when you give your decision (§ 1681m(b)).
What happened to the CFPB’s screening guidance?
On May 12, 2025 the Consumer Financial Protection Bureau withdrew 67 guidance documents, including its 2021 advisory opinion on name-only matching and its 2024 advisory opinion on background screening reports (90 FR 20084). The statute did not change: an agency must still follow reasonable procedures to assure maximum possible accuracy (15 U.S.C. § 1681e(b)), and the applicant can still sue.
What happens if you get it wrong?
| Kind of violation | What the consumer can recover |
|---|---|
| Willful | Actual damages or statutory damages of $100 to $1,000, punitive damages, costs and attorney’s fees |
| Negligent | Actual damages, costs and attorney’s fees |
See 15 U.S.C. § 1681n and § 1681o. When you are finished with a report, dispose of it securely; the FTC’s Disposal Rule requires reasonable measures such as shredding or wiping files.
Frequently asked questions
Do I need to send a notice if I approve the applicant?
Not if you approve on the terms you offer every applicant. If the report led you to require a co-signer, a larger deposit or higher rent, that is adverse action and needs a notice.
Can I just tell the applicant the reason by phone?
The statute allows oral notice, but a written or electronic notice is the only kind you can prove later, and some states require it in writing.
Do I have to tell the applicant exactly why they were denied?
The FCRA requires the specific items listed above, not a full explanation, though the credit-score disclosure includes key factors. Some state and local laws, including fair chance laws, require you to state the reason.
State-by-state rules
- How much can a landlord charge for a rental application fee? — compared across 12 states
Sources
- 15 U.S.C. § 1681b, Permissible purposes of consumer reports, Legal Information Institute
- 15 U.S.C. § 1681e, Compliance procedures, Legal Information Institute
- 15 U.S.C. § 1681i, Procedure in case of disputed accuracy, Legal Information Institute
- 15 U.S.C. § 1681j, Charges for certain disclosures, Legal Information Institute
- 15 U.S.C. § 1681m, Requirements on users of consumer reports, Legal Information Institute
- 15 U.S.C. § 1681n, Civil liability for willful noncompliance, Legal Information Institute
- 15 U.S.C. § 1681o, Civil liability for negligent noncompliance, Legal Information Institute
- Using Consumer Reports: What Landlords Need to Know, Federal Trade Commission
- Interpretive Rules, Policy Statements, and Advisory Opinions; Withdrawal, 90 FR 20084 (May 12, 2025), Federal Register
- 16 CFR Part 682, Disposal of Consumer Report Information and Records, Legal Information Institute
How Seayora helps
FCRA compliance: Adverse action notices are composed from the decision and the report, and kept with the application.
This article is general information, not legal advice. Landlord-tenant law varies by state and city and changes often, so check the current rule for your property and talk to an attorney before acting on a dispute.
How we write and check these guides: editorial standards.
Related on Seayora
- Tenant Screening: What Landlords Need to Know — Guide. How to screen rental applicants fairly and legally: credit and background checks, consistent criteria, the FCRA’s adverse action notice and fair housing.
- FCRA-Compliant Screening — Feature. Tenant screening built to FCRA requirements, including secure applicant-entered data and adverse-action support when you decline an applicant.
- Criminal Background Checks for Renters: Fair Chance Laws in 2026 — Guide. When a landlord may use an applicant’s criminal record: assisted-housing rules, the FCRA, and fair chance laws in NJ, NYC, DC, Maryland and Cook County.
- Does a Rental Property LLC Have to File a BOI Report in 2026? — Guide. No: FinCEN’s August 2026 final rule exempts companies created in the U.S. from beneficial ownership reporting. What changed, and who still has to file.
- FCRA & Screening Compliance — Documentation. A practical walkthrough of your FCRA obligations when using screening reports, including adverse action.
- Tenant Screening & Background Checks — Documentation. Screening is not available yet — no consumer reporting agency is connected and no fee is charged. How it will work, and the FCRA responsibilities that come with it.