The Adverse Action Notice is a requirement of the Fair Credit Reporting Act (FCRA) if you, the property manager, use any tenant screening reports to decline housing to your rental applicant. Your decision doesn’t have to be entirely based on the screening reports but once you run these reports and decline the applicant, you owe him an adverse action letter.

The Form Of Adverse Action Notice

The way you notify your applicant about the denial is up to you. You can inform the applicant:

  • Verbally
  • In writing
  • Or electronically

What Has To Be Included

  • Name of the consumer reporting agency (e.g. LeaseRunner, Ltd.)
  • Phone number of the agency (LeaseRunner’s phone number is 303-325-3665.)
  • Explanation that the consumer reporting agency (LeaseRunner) did not make the decision to take adverse action and cannot give the renter the specific reason why the adverse action was taken
  • Explanation of renters rights under FCRA addressed below
  • Credit score information if credit score was used for adverse action also addressed below.

Applicant’s Rights

These rights should be communicated to the applicant:

  • The first right is to obtain a free copy of the tenant screening report that was processed on the prospective renter within 60 days from the mentioned consumer reporting agency.
  • The second right is to dispute any inaccurate or incomplete information in the report furnished by the consumer reporting agency (LeaseRunner).

Credit Score Information

If you use credit score to take adverse action, you must then include the following information:

  1. The applicant’s credit score used.
  2. The range of possible credit scores under the model that was used. This is obvious on the credit report.
  3. Up to four key factors that adversely affected the applicant’s credit score. These are listed on the credit report
  4. Number of inquiries listed on the credit report
  5. The date the credit score was created (or credit report processed)
  6. The name of the entity that provided the credit score (LeaseRunner).

Example Of Adverse Action Letter With Credit Score Used

Dear {applicant},

This Adverse Action Notice provided to you due to the denial of rental housing is based in whole or in part on information contained in a consumer report. The following is provided per 15 U.S.C. §1681m:

  • The adverse action was the following: Denial of rental housing for the property address {propertyAddress}.
  • The names, addresses, and telephone numbers of the consumer reporting agencies are as follows: LeaseRunner, Ltd. (Reseller) 1755 Telstar Dr. Ste. 300, Colorado Springs, CO 80920 (303) 325-3665 www.leaserunner.com and Experian, Inc. P.O. Box 4500 Allen, TX 75013 877-FACTACT www.annualcreditreport.com The consumer reporting agencies did not make the decision to take the adverse action and are unable to provide you with the specific reasons why the adverse action was taken.
  • Your numerical credit score was: {creditScore}
    • The range of possible scores was 300-850.
    • All of the key factors that adversely affected the credit score in the model used were the following: {list4factors}.
    • The credit score was created on {dateProcessed}.
  • You have the right to obtain a free copy of a consumer report from the consumer reporting agency referred to above within a 60-day period. You have the right to dispute with a consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency.

Sincerely,

{yourName}