Adverse action in three steps

What “adverse action” means

If you may make a decision not to hire, not to promote, or to terminate employment based on information in a consumer report, the Fair Credit Reporting Act (FCRA) requires a specific sequence of notices and time to respond.

The 3-step sequence

1. Pre‑adverse action notice

   Share the report and required disclosures, and notify the candidate that an adverse decision is being considered.
2. Waiting period

   Allow time for the candidate to review and dispute. (Your waiting window should match your policy and counsel.)
3. Final adverse action notice

   If you proceed, send the final notice with required information and next steps.

How to make it repeatable

• Standardize criteria

  Tie decisions to job relevance and documented policy.
• Document every step

  Time-stamped notices and artifacts reduce “why did this happen?” moments.
• Keep candidate experience clear

  Plain language reduces confusion and escalations.