Adverse Action

AAA

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.

INVESTOPEDIA EXPLAINS '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. Equal Credit Opportunity Act - ...

    A regulation created by the U.S. government that states that ...
  2. Credit Score

    A statistically derived numeric expression of a person's creditworthiness ...
  3. Credit Report

    A detailed report of an individual's credit history prepared ...
  4. Insurance Score

    A rating computed and used by insurance companies that represents ...
  5. Underwriting

    1. The process by which investment bankers raise investment capital ...
  6. Furnisher

    A company that provides information about a consumer, including ...
RELATED FAQS
  1. What are the differences between preference shares and bonds?

    Establishing a checking account with a bank requires more than an initial deposit or verification of a customer's identity. ... Read Full Answer >>
  2. What do creditors have to report to credit bureaus?

    Creditors are not required by law to report anything to credit bureaus, although many businesses choose to report on-time ... Read Full Answer >>
  3. Why do banks use the Five Cs of Credit to determine a borrower's credit worthiness?

    Banks use rigorous policies and analyses when determining if and how much money to lend to clients. The methods used by banks ... Read Full Answer >>
  4. Does shopping for the best interest rate affect my credit score?

    Shopping for interest rates does not necessarily affect a person's credit score. When a borrower submits an application to ... Read Full Answer >>
  5. Do all banks use the Five Cs of Credit when evaluating potential borrowers?

    Both individual and business borrowers are asked to provide information related to their credit history, income and debt ... Read Full Answer >>
  6. How does your checking account affect your credit score?

    Your credit report provides a snapshot for prospective lenders, landlords and employers of how you handle credit. For any ... Read Full Answer >>
Related Articles
  1. Home & Auto

    How An Insurance Company Determines Your Premiums

    Find out how insurers use credit history to build an insurance score and how it could affect your bottom line.
  2. Credit & Loans

    How To Dispute Errors On Your Credit Report

    It just takes some time and effort to rebound from a nasty case of "credit rejection shock."
  3. Home & Auto

    6 Tips To Get Approved For A Mortgage

    You can change your bank's answer to a loan request from 'No' to 'Yes'. Find out how.
  4. Credit & Loans

    The History Of Consumer Credit Rights

    The Fair Credit Billing Act of 1974 gave consumers the power to dispute credit card charges.
  5. Credit & Loans

    How To Increase Your Appeal To Prospective Lenders

    Making a business eligible for loans/credit cards at the best possible rates requires crafting an excellent credit profile through the smart use of credit.
  6. Credit & Loans

    Top Credit Cards For The Ultra Rich

    Only a few people qualify for these elite cards. The question is, are the lush perks big bucks can buy you worth the cost?
  7. Credit & Loans

    Is My Credit Score Useful Outside The U.S?

    If you're hoping that your credit score will follow you overseas – or worried that it will– here's a quick primer on how your score will add up abroad.
  8. Credit & Loans

    Is It Worth Paying To Check Your Credit Score?

    Generally, a free credit report is all you need. If you've had some credit issues, it may be worth buying your credit score to get a finer level of detail.
  9. Credit & Loans

    New Rules That Could Trash (or Help) Your Credit

    Cable bills and similar financial obligations will soon be factored into your credit score. Good news if you're an on-time payer. If not, become one!
  10. Credit & Loans

    Why Your Credit Report Errors Will Now Be Easier To Fix

    Equifax, Experian and TransUnion have reached an agreement to make changes to how they handle credit report errors and unpaid medical bills.

You May Also Like

Hot Definitions
  1. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  2. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  3. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  4. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  5. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  6. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
Trading Center