DEFINITION of 'Adverse Action'

An action that denies an individual or business credit, employment, insurance or other benefits. An adverse action is generally taken by a business or government based on a criminal past or information found in credit reports.

BREAKING DOWN 'Adverse Action'

Adverse action is defined in various laws passed by Congress, including the Equal Credit Opportunity Act and the Fair Credit Reporting Act. In the event of an adverse action, applicable law describes the various remedies that may be taken. For example, if a consumer is turned down for a loan because of negative information contained in a credit report, he or she can review the report at no cost.

RELATED TERMS
  1. Adverse Credit History

    A track record of poor repayment history on one or more loans ...
  2. Credit Report

    A detailed report of an individual's credit history prepared ...
  3. Credit Rating

    An assessment of the creditworthiness of a borrower in general ...
  4. Negative Information

    Data in a consumer’s credit report that lowers his or her credit ...
  5. Credit Reporting Agency

    This term refers to businesses that maintain historical information ...
  6. Derogatory Information

    Information on a person's credit report that can be legally used ...
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