Landlords and the FCRA: Adverse Action Notices Made Simple
If anything in a credit report played a part in turning an applicant down, asking for a co-signer or charging a bigger deposit, the FCRA says you owe them a notice. It's one page, and here's exactly what goes on it.
On this page
- When a landlord owes an adverse action notice
- The adverse action notice landlord checklist: what it must include
- A sample adverse action notice for landlords
- Timing and delivery
- What happens if you don’t send it
- Mistakes we see landlords make
- Build it into your process once
- What the applicant can do next
- Frequently asked questions
If information from a credit report plays any part in a decision that goes against a rental applicant, the Fair Credit Reporting Act requires a landlord to give them an adverse action notice. That includes an outright denial, and it also includes approving them on worse terms: requiring a co-signer, a bigger security deposit or higher rent than you’d otherwise charge. The notice tells the applicant where the report came from, that the bureau didn’t make the decision, and how to get a free copy and dispute errors.
Most landlords who skip it aren’t cutting corners on purpose. They just don’t know that “approved with a larger deposit” counts. The CFPB said as much in its 2022 consumer snapshot on tenant background checks, which found landlords weren’t consistently sending these notices. It’s an easy problem to fix.
This is a plain-English guide, not legal advice. State and local rules can add requirements, so check yours or ask a local attorney.
When a landlord owes an adverse action notice
The FCRA’s definition of adverse action (in 15 U.S.C. § 1681a) covers any action that’s adverse to the consumer’s interests in a transaction they started, and renting a home is one. The CFPB’s guidance for renters spells out the practical version: denial, a co-signer requirement, a larger deposit, or higher rent than other applicants pay all count. In real situations, it sorts out like this:
| What happened | Notice needed? |
|---|---|
| Denied because the score was below your cutoff | Yes |
| Approved, but only with a co-signer, because of the report | Yes |
| Approved with a deposit higher than your standard, because of the report | Yes |
| Denied for income alone, and the report didn’t factor in | No FCRA notice (keep notes showing why) |
| Denied over an eviction you found yourself in public court records | Not for that alone. If a screening company supplied the record, it’s a consumer report, so yes |
| Approved on your standard terms | No |
| Report was one of several reasons for the denial | Yes, even if it was a minor reason |
That last row is where most mistakes happen. A mixed decision (“income was tight and the score was low”) still requires a notice, because the report contributed.
The adverse action notice landlord checklist: what it must include
Section 615(a) of the FCRA, 15 U.S.C. § 1681m, lists the contents. For a landlord using a credit report with a score, that comes down to six things:
- Notice of the action itself. Plainly say what you decided: the application was denied, or approved with conditions.
- The numerical credit score you used, if a score played a part, along with:
- the range of possible scores for that model (300 to 850 for FICO® Score 4),
- the key factors that hurt the score, up to four (or five if the number of inquiries is one of them),
- the date the score was created, and
- who provided the score.
- The name, address and phone number of the consumer reporting agency that supplied the report. Nationwide bureaus have to be listed with their toll-free number.
- A statement that the bureau didn’t make the decision and can’t explain why it was made.
- The applicant’s right to a free copy of their report from that bureau if they ask within 60 days.
- The applicant’s right to dispute inaccurate or incomplete information with the bureau.
When you check an applicant through us, the report comes from TransUnion, and every result includes the FICO Score 4, its date and the top factors holding it back. So you have everything item 2 asks for already, in the order you need it. Our compliance page summarizes the rest.
A sample adverse action notice for landlords
This one is fictional, so adapt it. Swap in your details and the real score information from the report.
Notice of Adverse Action
May 9, 2025
Dear Dana Whitfield,
Thank you for applying to rent 14 Alder Street, Unit B. We are unable to approve your application as submitted. We can approve it with a qualified co-signer.
This decision was based in whole or in part on information in a consumer report from:
TransUnion LLC, P.O. Box 2000, Chester, PA 19016, (800) 916-8800
TransUnion did not make this decision and is unable to tell you why it was made.
Your credit score: 604 (FICO Score 4, scale 300 to 850), created May 7, 2025, provided by TransUnion.
Key factors that adversely affected your score:
- Serious delinquency
- Proportion of balances to credit limits is too high on revolving accounts
- Length of time accounts have been established
- Too many accounts with balances
You have the right to get a free copy of your report from TransUnion if you ask within 60 days of receiving this notice. You also have the right to dispute the accuracy or completeness of any information in the report directly with TransUnion.
Sincerely, Kim Alvarez, Owner, Alder Street Rentals, (555) 555-0142
A few notes on the sample. The factor wording should match what the report actually says. Bureau contact details can change, so confirm TransUnion’s current address and number on its website before you print a stack of these. And notice what’s missing: no lecture, no speculation about the applicant’s finances. Keep it factual.
Timing and delivery
The FCRA doesn’t set a fixed number of days for a landlord’s notice. The practical rule is to send it when you communicate the decision, in the same email or letter. If you tell someone by phone that they need a co-signer, follow up the same day in writing.
Written or emailed notices are better than verbal ones for two reasons. The score disclosures have to be written or electronic anyway. And a written notice is your proof. Save a copy with the application file and the applicant’s consent.
What happens if you don’t send it
This part is messier than most landlord guides let on. The FCRA’s general liability sections, § 1681n for willful violations (actual or statutory damages of $100 to $1,000, punitive damages, attorney fees) and § 1681o for negligent ones, cover most of the statute. But § 1681m(h)(8) says those two sections don’t apply to failures to comply with “this section,” and a number of federal courts, including the Seventh Circuit in Perry v. First National Bank (2006), have read that to rule out private lawsuits under § 1681m. Courts haven’t been perfectly unanimous, and a lawyer will tell you it depends on where you are.
What isn’t in doubt is government enforcement. The FTC, the CFPB and state attorneys general can all go after notice failures, and in 2023 the FTC went out of its way to remind housing providers that the notice is required even when the report was only a minor factor. State tenant screening laws can add their own requirements and their own remedies. So “the applicant probably can’t sue me under federal law” is a bad reason to skip a one-page letter.
One more provision works in your favor. Section 615(c) says a person isn’t liable for violating the adverse action section if they can show they maintained reasonable procedures to comply. In plain terms: a written process that you actually follow is your protection when a single notice slips through.
Mistakes we see landlords make
Treating conditional approvals as approvals. “Yes, with an extra month’s deposit” because of the score is adverse action. It’s the easiest one to miss, because it doesn’t feel like a no.
Giving a vague brush-off. “We went with another applicant” isn’t a notice. If the report played a part, the FCRA contents are still required.
Naming the wrong source. The notice names the agency that supplied the report. If you used a screening company, name them. If you used our lookup, the bureau is TransUnion.
Skipping the score details. If you used a score, the number, range, key factors, date and source all have to be there. The factor list is the part people forget.
Keeping reports forever. When you’re done with a consumer report, the FTC’s Disposal Rule (16 CFR Part 682) requires you to dispose of it securely. Shred paper, delete files properly, and keep only what you need for your records.
Build it into your process once
The easiest way to never miss a notice is to make the decision and the notice the same step.
- Get written consent before you check anyone. It’s the simplest permissible purpose, and our post on credit check consent forms has wording that works.
- Write your criteria down before you list the unit: score bands, income ratio, what triggers a co-signer. Our guide on what credit score you need to rent an apartment shows a banded approach. It’s also worth deciding in advance how you’ll treat the rental application red flags that aren’t about credit at all.
- Run the check and save the result with the application.
- Decide against your written criteria. If the outcome is anything other than approval on standard terms, and the report played a part, send the notice from your template that day.
- Store and then dispose of the report on a schedule.
For the full screening workflow around this, see our tenant credit check guide, and for the legal basis behind every lookup, permissible purpose under the FCRA. If you’d like to qualify people before you ever book a showing, pre-screening tenants covers that.
What the applicant can do next
It helps to know what happens after the notice lands, because some applicants will call you. They can request their free report from TransUnion, check it, and dispute errors. The CFPB’s page on what to do if a tenant screening report gets you denied says bureaus generally have 30 days to investigate a dispute, sometimes 45. If they come back with a corrected report that meets your criteria, you can reconsider, and if the unit is still open, there’s no reason not to. A tenant who fixed an error on their own file is usually a tenant who reads their mail.
Frequently asked questions
Can I give an adverse action notice verbally?
The FCRA allows oral, written or electronic notice, but the credit score disclosures have to be written or electronic. Written is the safer habit anyway: it proves you sent it, and the applicant has the details in front of them.
Do I have to tell the applicant exactly why I denied them?
The FCRA notice doesn't require you to list your own reasons for a rental decision. It requires the score disclosures, the bureau's contact details, a statement that the bureau didn't make the decision, and the applicant's rights. Many landlords add a short plain reason anyway, which tends to cut down on follow-up calls.
Do I need to send a notice if I rented to someone else first?
If the other applicant simply applied first and you never relied on this person's report, there's usually no adverse action based on the report. If their credit played any part in choosing the other person, send the notice.
What if a co-applicant's credit caused the denial?
Send a notice to each applicant whose report contributed to the decision. If only one person's report was the issue, that person needs the notice. When in doubt, notifying each applicant whose report you pulled is the cautious choice.
