Adverse Action

An adverse action is when you apply for credit, employment or insurance and 1) your credit application is denied; or 2) a counterproposal is made upon terms worse than what you requested and you do not accept the counterproposal.  If adverse action is taken the creditor or party relying on the credit report must notifiy you of the adverse action, identify the reporting agency from which the report was obtained, and give you a summary explanation of the bad information in your credit file, (i.e. late payment, charge off, repossession, inadequate credit history, debt too high for income.)    The failure to do this is a violation of the Fair Credit Reporting Act and/or the Equal Credit Opportunity Act.