When a consumer report contributes to an unfavourable rental decision, federal law requires an adverse action notice. The FTC lists what counts: “Denying the application; Requiring a co-signer on the lease; Requiring a deposit that would not be required for another applicant; Requiring a larger deposit than might be required for another applicant; and Charging a higher amount for rent than for another applicant.” The notice must give “the name, address, and phone number of the CRA that supplied the report,” a statement that the agency “did not make the decision to take the unfavorable action and can’t give specific reasons for it,” and “a notice of the person’s right to dispute the accuracy or completeness of any information the CRA furnished, and to get a free report from the CRA if the person asks for it within 60 days.” The notice may be written, electronic or oral; written “is the best practice.”
When it is triggered
| Decision | Report contributed? | Notice |
|---|---|---|
| Denial after reading the credit or screening report | Yes | Required |
| Approval on condition of a co-signer because of the report | Yes | Required |
| Larger deposit or higher rent because of the report | Yes | Required |
| Denial for income below the criterion, verified from pay stubs only | No report involved | Not required by the FCRA; Texas §92.3515 criteria still govern |
| Denial for a false statement discovered from a reference call | No consumer report | Not required by the FCRA |
| Denial based partly on the report and partly on other grounds | Yes — “in whole or in part” | Required |
The notice, ready to send
- Applicant’s name and the property applied for; date.
- The action taken (denied; approved with a co-signer; approved at a higher deposit).
- That the decision was based in whole or in part on information in a consumer report.
- The consumer reporting agency’s name, address and toll-free number.
- That the agency did not make the decision and cannot explain it.
- The right to a free copy of the report from the agency within 60 days and the right to dispute its accuracy or completeness with the agency.
- Send it in writing (e-mail if the applicant used e-mail); keep a copy with the decision file.
Texas timing
Under Property Code §92.352 an applicant not notified of acceptance within seven days is deemed rejected; the adverse action notice is separate and follows the decision whenever a report contributed. Sending both together — the Texas decision notice and the FCRA notice — closes the file in one envelope.
Frequently asked questions
When must a landlord send an adverse action notice?
Whenever a consumer report contributes, in whole or in part, to denying an application, requiring a co-signer, requiring a larger deposit or charging higher rent (FTC).
What must the notice contain?
The consumer reporting agency’s name, address and phone number; a statement that the agency did not make the decision and cannot give reasons; and the applicant’s rights to a free report within 60 days and to dispute the information (FTC).
Can the notice be given orally?
The FTC says written, electronic or oral notice is permitted, but written notice is the best practice — and the only one that leaves proof (FTC).
Sources
Rules change and the right answer can depend on the home, the city, the lease and the timing. These are the official pages this guide relies on; check them before signing, charging a fee, sending a notice or making a legal decision.
- FTC — Using consumer reports: what landlords need to know ↗
- CFPB — Tenant screening reports (key terms) ↗
- Texas Property Code, Chapter 92 — Residential Tenancies ↗
- Texas State Law Library — Leases ↗
General information for U.S. landlords, with a Texas focus. This guide is not legal, tax or accounting advice. Consult a qualified professional for your situation. Written by the rentalfreelease.com Editorial Team; last reviewed September 19, 2026.