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Adverse action notice generator

An adverse action notice tells a credit applicant you declined them, offered terms they didn't take, or otherwise acted against them, and why. Under Regulation B the creditor sends it within 30 days of a completed application.

For dealers who arrange financing: write the adverse action notice (or a counteroffer) when credit is denied or offered on other terms. It includes the Reg B reasons and ECOA notice and the credit report and score details FCRA 615 asks for. Send it within 30 days of a completed application (12 CFR 1002.9).

Your dealership
Applicant

The notice is due within 30 days.

Decision

Principal reasons (up to 4)

The FTC for most dealers.

Credit bureau
Credit score

Key factors that hurt the score (from the report, up to 4)

Still needed: the dealer's name, the dealer's address, the applicant's name, the notice date, the credit bureau's name, the credit bureau's address, the credit bureau's phone, the credit score, the date of the score, at least one key factor, at least one specific reason.

12 CFR 1002.9; FCRA 615(a) (15 U.S.C. 1681m); model form C-1. Keep applications and notices at least 25 months (12 CFR 1002.12(b)).

Preview

Statement of credit denial, termination or change

Date
[date]
Applicant
[Applicant name]
Address
[Applicant address]
Action taken
Your application for credit was denied.
Creditor
[Dealer name], [Dealer address]

Principal reasons for our decision

  • [reason]

Information from a consumer reporting agency

Our credit decision was based in whole or in part on information obtained in a report from the consumer reporting agency listed below. You have a right under the Fair Credit Reporting Act to know the information contained in your credit file at the consumer reporting agency. The reporting agency played no part in our decision and is unable to supply specific reasons why we have taken this action. You also have a right to a free copy of your report from the reporting agency, if you request it no later than 60 days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency.

Consumer reporting agency
[Bureau name]
Address
[Bureau address]
Toll-free phone
[Bureau phone]

We also obtained your credit score from this consumer reporting agency and used it in making our credit decision. Your credit score is a number that reflects the information in your consumer report. Your credit score can change, depending on how the information in your consumer report changes.

Your credit score
[score]
Scores range from
a low of 300 to a high of 850
Date of the score
[date]
Source
[source]

Key factors that adversely affected your credit score:

  • [key factor]

If you have any questions regarding this notice, contact [Dealer name], [Dealer address].

Notice: The federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning this creditor is: Federal Trade Commission, Consumer Response Center, Washington, DC 20580.

Built on the federal model forms (12 CFR 1002.9; FCRA 615(a) (15 U.S.C. 1681m); model form C-1). Templates and tools, not legal advice.

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Templates and tools, not legal advice.

Rules checked . Templates and tools, not legal advice.

At a glance

Who it's for
Car dealers who arrange or extend financing, including buy-here-pay-here lots. Anyone who wants the plain rules can read on.
Deadline
30 days after a completed application (12 CFR 1002.9)
Keep
25 months (12 CFR 1002.12)
Rules
ECOA / Regulation B, and FCRA section 615
On this page

What an adverse action notice is

Two laws ask for one. The Equal Credit Opportunity Act, through Regulation B (12 CFR 1002.9), requires a creditor to tell an applicant what it decided on their application. When the decision goes against them, that letter is the adverse action notice. The Fair Credit Reporting Act, section 615(a), adds disclosures when the decision was based on a credit report.

Adverse action includes a denial, a counteroffer the applicant doesn't accept, and an unfavorable change to an existing account. Most dealers send one combined notice that covers both laws.

What the notice must say

Regulation B (12 CFR 1002.9):

  • It is in writing and states the action taken.
  • The creditor's name and address.
  • The ECOA notice that discrimination in credit is illegal.
  • The name and address of the federal agency that oversees the creditor.
  • The specific reasons, or the applicant's right to ask for them.

FCRA section 615(a), when a credit report was used:

  • The credit score used and the key factors behind it.
  • The credit bureau's name, address and phone number.
  • That the bureau didn't make the decision and can't explain it.
  • The right to a free copy of the report and to dispute anything wrong in it.

Who sends it on a dealer-arranged deal

A dealer that "regularly participates in a credit decision, including setting the terms of the credit" is a creditor under Regulation B (12 CFR 1002.2(l)). On an indirect deal, the application often goes to several lenders:

  • If the buyer accepts credit from one of them, the others don't have to send a notice (12 CFR 1002.9(g)).
  • If no credit is offered or accepted, each creditor that took adverse action must notify the buyer, directly or through someone else. A notice sent for several creditors must name each one.

No rule says whether the dealer or the lenders send the combined notice. Your agreements with your lenders decide it, so check them and write the answer into your process.

Deadlines and records

WhatWhenRule
Notice after a completed applicationWithin 30 days12 CFR 1002.9(a)
Counteroffer the buyer does not acceptA separate time limit applies12 CFR 1002.9(a)
Keep applications and notices25 months12 CFR 1002.12(b)(1)

Rules checked and limits

Rules checked October 31, 2026. We read every rule on this page in the eCFR or on the agency's own site, and each is linked in the sources below. We re-check them every quarter.

Templates and tools, not legal advice. CarShots is software, not a law firm. For a question about your own dealership, ask your attorney or your state dealer association.

Common questions

What is an adverse action notice?

A written notice to a credit applicant that their application was declined, or that they got a counteroffer they didn't accept, with the reasons or their right to ask for them. When a credit report was used, it also gives the score and the bureau's contact details.

What does adverse action mean?

A decision against the applicant: a denial, a counteroffer they don't accept, or a change against them on an existing account.

Does a dealer have to send one if the lender declined the deal?

It depends on who took the action and your lender agreements. If no lender offered credit, each creditor that took adverse action must notify the buyer, directly or through a third party such as the dealer. One combined notice can cover them if it names each creditor.

How long do I keep adverse action notices?

25 months after you notify the applicant, under 12 CFR 1002.12.

Is a counteroffer an adverse action?

It is when the applicant doesn't accept it. Regulation B sets a separate time limit for that notice.

Sources

Last verified October 31, 2026.

  1. Regulation B, 12 CFR 1002.9: notifications (eCFR)ecfr.gov
  2. Regulation B, 12 CFR 1002.12: record retention (eCFR)ecfr.gov
  3. Regulation B, 12 CFR 1002.2: definitions (eCFR)ecfr.gov
  4. FCRA section 615, 15 U.S.C. 1681m (Cornell LII)law.cornell.edu

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