Adverse Action Meaning
Adverse Action is a notice to inform the applicant or borrower of a denied credit application. The denied credit application is based on the data displayed on a given credit report. The credit data also includes the details of the credit reporting agency. The details of the credit reporting agency are written on the Adverse Action Notice.The Adverse Action Notice according to Regulation B of the Equal Credit Opportunity Act (ECOA) is designed to help the applicants or borrowers. The applicants or borrowers are entitled to the transparency of the credit underwriting process and to the protection against possible credit card discrimination. Credit card discrimination can be avoided by requiring the creditors to provide and explain the specific reasons for the Adverse Action Notice.