The adverse action process, step by step
What a pre-adverse action notice is, how long to wait, and what the final adverse action notice must include — the FCRA steps an employer follows before acting on a background check.
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FCRA workflows are built primarily for tenant screening and hiring decisions. If a result will help decide whether to hire someone or rent to them, the check has to run as an FCRA-regulated consumer report, with a permissible purpose, consent, accuracy controls and a dispute path for the person. Our standard search and API are not a consumer report. FCRA workflows run through FCRA Partner Access, for background check companies and screening platforms under a written FCRA agreement.
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What “adverse action” means
When an employer uses a background check — legally, a consumer report — and decides not to hire, promote or retain someone because of something in it, that decision is an adverse action. The federal Fair Credit Reporting Act does not stop employers from making it. It requires them to follow a sequence of notices first, so the person can see the report and correct it if it is wrong.
The sequence has two halves: a pre-adverse action step before the decision is final, and an adverse action notice once it is. Skipping the first half is one of the most common FCRA errors employers make.
The adverse action process, step by step
| Step | What happens | Where it comes from |
|---|---|---|
| 1. Disclosure and authorization | Before ordering the report, the employer gives a standalone written disclosure and gets the applicant’s written authorization | § 1681b(b)(2) |
| 2. Report and review | The employer reviews the report against the job, ideally with an individualized assessment | Employer policy; EEOC guidance |
| 3. Pre-adverse action notice | Before acting, the employer sends a copy of the report and a written summary of the person’s FCRA rights | § 1681b(b)(3)(A) |
| 4. Waiting period | The person has time to review the report and respond or dispute | Practice — the statute sets no number |
| 5. Adverse action notice | If the decision stands, the employer sends the final notice with the required contents | § 1681m(a) |
What a pre-adverse action notice is — and must include
“Pre-adverse action” means the employer has not made the decision final yet. Before taking adverse action based in whole or in part on a consumer report, the employer must give the person two things: a copy of the report and a written description of their rights under the FCRA — the summary of rights prescribed by the Consumer Financial Protection Bureau (15 U.S.C. § 1681b(b)(3)(A)).
Many employers also identify which item in the report is driving the decision and invite the person to explain it. That is not a word-for-word requirement of the statute, but it is what makes the step useful: the person may have a record that is not theirs, a charge that was dismissed, or context the employer would want to hear.
- A copy of the consumer report the decision relies on
- The CFPB’s A Summary of Your Rights Under the Fair Credit Reporting Act
- Commonly: the item at issue and how to respond, and the time allowed
How long is the waiting period?
The FCRA does not set a number of days between the pre-adverse notice and the final decision. What it requires is that the notice come before the action — and a notice sent the same moment as a rejection does not give the person any chance to respond. In practice, many employers wait five business days, and some state and local fair-chance laws set specific periods of their own.
If the person disputes the report during the waiting period, a sensible policy holds the decision until the consumer reporting agency finishes its reinvestigation. The dispute guide covers that side.
What the final adverse action notice must say
Once the decision is final, 15 U.S.C. § 1681m(a) sets the contents of the notice.
Read the full requirements at 15 U.S.C. § 1681m. Credit-score disclosures in the same section apply when a credit score was used, which is uncommon in criminal-record screening.
- Notice that adverse action was taken — oral, written or electronic
- The name, address and phone number of the consumer reporting agency that furnished the report (toll-free if it compiles files nationwide)
- A statement that the agency did not make the decision and cannot explain why it was made
- Notice of the person’s right to a free copy of the report from the agency within 60 days
- Notice of the right to dispute the accuracy or completeness of the report with the agency
Common adverse action mistakes
Skipping the pre-adverse notice
Sending only a rejection, or sending both notices at once, leaves the person no chance to respond before the decision.
Acting on a name-only match
A record that shares a name but not a date of birth may belong to someone else. Confirm identity before treating it as the applicant’s.
Treating arrests as convictions
An arrest or a pending charge is not a finding of guilt. Read the disposition before relying on a criminal record.
Forgetting state and local rules
Many states and cities add fair-chance steps, waiting periods or restrictions on what may be considered. Federal steps are the floor.
Where the background check data fits in
The adverse action process applies when a decision is based on a consumer report from a consumer reporting agency. Offendersearch results are not a consumer report. If you are screening applicants or tenants, order the report through a consumer reporting agency, and use the guides on reading a background check and turnaround to understand what comes back.
Adverse action: common questions
What does pre-adverse action mean?
It is the step before an employer makes a final decision based on a background check: the employer sends the person a copy of the report and a summary of their FCRA rights, so they can review it and respond.
What is the adverse action process for a background check?
Disclosure and authorization before the report; review of the report; a pre-adverse action notice with a copy of the report and the summary of rights; a waiting period; and, if the decision stands, a final adverse action notice with the contents set by 15 U.S.C. § 1681m(a).
How long do employers have to wait after a pre-adverse action notice?
Federal law sets no specific number of days; it requires the notice to come before the action. Many employers wait five business days, and some state and local laws set their own periods.
Does an employer have to tell me why I was not hired?
If the decision was based in whole or in part on a consumer report, the employer must follow the adverse action steps, including giving you a copy of the report before acting. The notice tells you which agency furnished the report and how to dispute it.
What can I do if I receive a pre-adverse action notice?
Read the report carefully. If something is wrong — a record that is not yours, a dismissed charge shown as open — tell the employer and dispute it with the consumer reporting agency named in the notice.
Does the adverse action process apply to tenant screening?
Section 1681m applies to any adverse action based on a consumer report, including rental decisions, so a landlord who denies an application because of a report must give the adverse action notice. The pre-adverse step in § 1681b(b)(3) is specific to employment.
This guide is general information about federal law, not legal advice. Offendersearch results are not a consumer report.