Adverse Action Notice for Landlords: What the FCRA Requires When You Deny an Applicant (2026)
Updated October 30, 2026. This guide summarizes the federal Fair Credit Reporting Act (FCRA) as published in the U.S. Code. It is general information, not legal advice. State and local laws can add requirements, so ask a local attorney if you are unsure.
Short answer: If you deny a rental application, or take another unfavorable action, based even partly on information in a consumer report, the FCRA requires you to tell the applicant. The notice must name the reporting agency with its address and phone number, say the agency did not make the decision, and explain the applicant's right to a free copy of the report within 60 days and to dispute errors. The statute allows the notice to be oral, written or electronic; sending it in writing gives you a record.
When does a landlord have to send an adverse action notice?
The rule is in 15 U.S.C. §1681m(a). It applies when a person "takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report." Three points follow from that wording:
"In whole or in part." The report does not need to be the only reason. If a credit or background report is one of the reasons you said no, the notice applies.
A consumer report from a reporting agency. Screening reports from a credit bureau or screening company generally are consumer reports. Your own notes from a phone call to a previous landlord are different, and §1681m has a separate rule for information from third parties that are not reporting agencies.
Adverse action means an unfavorable decision on the application. Under §1681a(k), the term covers an action "made in connection with an application that was made by, or a transaction that was initiated by, any consumer" and "adverse to the interests of the consumer." A denial clearly fits. For other outcomes, such as asking for a larger deposit or a co-signer because of the report, ask an attorney; many landlords send the notice whenever the report affected the terms.
Why can a landlord look at the report at all?
The FCRA lists the purposes for which a consumer report may be obtained. One of them is a "legitimate business need for the information in connection with a business transaction that is initiated by the consumer" (§1681b(a)(3)(F)). A rental application the tenant submits is that kind of transaction. Run reports only on people who have applied, and only for the purpose of deciding on that application.
What must the notice contain?
Under §1681m(a), you must give the applicant:
Notice of the adverse action. The statute allows oral, written or electronic notice.
The reporting agency's details. The name, address and telephone number of the agency that furnished the report, including a toll-free number if the agency maintains consumer files on a national basis.
A statement that the agency did not decide. The notice must say that the reporting agency "did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why."
The right to a free report. The applicant can get a free copy of the report from the agency, and the notice must indicate the 60-day period for requesting it.
The right to dispute. The applicant can dispute the accuracy or completeness of anything in the report directly with the agency.
A credit score disclosure, if you used a score. If a numerical credit score was used in your decision, the statute requires a written or electronic disclosure of that score and related information described in §1681g(f).
What does a sample notice look like?
Adapt this to your situation and your state, and keep a copy with the application file. It is a template, not legal advice.
Notice of adverse action. Thank you for applying to rent [property address]. We are unable to approve your application [or: we are offering different terms]. This decision was based in whole or in part on information in a consumer report from [reporting agency name, address, telephone number, toll-free number]. The reporting agency did not make this decision and cannot explain the specific reasons for it. You have the right to obtain a free copy of your report from the agency if you request it within 60 days of receiving this notice, and to dispute with the agency the accuracy or completeness of any information in the report. [If a credit score was used: Your credit score was [score], provided by [agency] on [date].]
What happens if a landlord skips the notice?
Liability depends on whether the failure was willful or negligent:
Willful violation: §1681n makes the violator liable for actual damages or damages of not less than $100 and not more than $1,000, any punitive damages the court allows, and the applicant's court costs and reasonable attorney's fees.
Negligent violation: §1681o makes the violator liable for actual damages plus costs and reasonable attorney's fees.
Deadline to sue: under §1681p, an action must be brought no later than the earlier of 2 years after the plaintiff discovers the violation or 5 years after the violation occurs.
The simplest protection is a routine: use the same notice, in writing, every time a report plays a part in a decision.
A simple adverse action routine for small landlords
Decide using written criteria. Set the same standards for every applicant before you review applications. Our tenant screening checklist can help.
Record the reasons. Note in the file which factors drove the decision, including whether the report was one of them.
Send the notice promptly. Use the template above, include the reporting agency's contact details, and keep a dated copy.
Handle disputes. If an applicant says the report is wrong, point them to the agency. The agency, not you, investigates the report's accuracy under the FCRA.
Review your process. Read our guides on how to screen tenants and the do's and don'ts of tenant screening.
Where does tenant screening software fit in?
Screening through a reporting agency produces the report; the notice is still your responsibility as the landlord making the decision. Hoozzee offers tenant screening through TransUnion, and you can read how it works on the tenant screening page. Whichever provider you use, keep the full report on file, because you need the reporting agency's name, address and telephone number to complete the notice. See plan details on the Hoozzee pricing page.
FAQ
Do I have to send an adverse action notice if I deny someone for income reasons?
The notice is required when the decision is based at least in part on information in a consumer report. If the denial rests entirely on information that did not come from a consumer report, such as income documents the applicant gave you, the FCRA notice is not triggered by that decision alone. If a report played any part, send the notice.
Can I give the notice by phone?
The statute allows oral, written or electronic notice. Written or electronic notice is easier to prove later, so most landlords send it that way.
Does the credit bureau tell the applicant why I denied them?
No. The notice must state that the reporting agency did not make the decision and is unable to provide the specific reasons.
How long does the applicant have to request a free report?
The notice must indicate the 60-day period for obtaining a free copy of the report from the reporting agency.
What if I only used the report to ask for a bigger deposit?
The statute's definition of adverse action covers decisions made in connection with an application that are adverse to the applicant. Ask an attorney how that applies to your case, and consider sending the notice when the report affected the terms you offered.
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