Adverse Action

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 Rating

    An assessment of the creditworthiness of a borrower in general ...
  3. Credit Reporting Agency

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

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

    An agreement where a customer can purchase goods on account (without ...
  6. Credit Limit

    The amount of credit that a financial institution extends to ...
Related Articles
  1. Investing

    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.
  2. Managing Wealth

    Common Sense Strategies For Adverse Markets

    Adverse markets require skillful adjustments to reduce risk and find new profit opportunities.
  3. Investing

    What's On A Consumer Credit Report?

    A look at the various components and considerations that go into one's credit report and credit score.
  4. Investing

    Check Your Credit Report

    Make sure there are no errors holding you back from obtaining a loan.
  5. Personal Finance

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  6. Investing

    Spotting Credit-Repair Scams

    Credit repair scams are common in today's debt-reliant world. Don't be a victim!
  7. Investing

    Why Bad Credit Is Bad For Financial Careers

    In order to obtain and maintain a career in the financial industry, it is also important to have a clean credit report.
  8. Personal Finance

    Build Your Credit Score

    Here are four good ways to build your credit score when you're starting from scratch. Do it right and you'll end up with excellent credit.
  9. Managing Wealth

    5 Common Misconceptions About Your Credit Report

    Your credit report is one of the most important factors in determining your ability to get loans and new credit and has a major influence on your rates.
  10. Markets

    Credit And Debt Management: Building Credit From Scratch

    by Cathy ParetoNow that we have a fair understanding of how your credit score is determined, let's introduce how credit is established from scratch. You must be of legal age (18) before you can ...
RELATED FAQS
  1. What is the difference between bad credit and no credit?

    The answer to this question will depend on what information (if any) is found on your credit report, such as any bankruptcy ... Read Answer >>
  2. How does adverse selection contribute to market failure?

    Examine an brief introduction to the adverse selection theory of market failure, and find out why economists disagree about ... Read Answer >>
  3. How do I get my free credit report and score from each credit bureau?

    Learn how to obtain copies of your credit report for free from the three credit bureaus and where you might find your credit ... Read Answer >>
  4. In what areas does adverse selection exist in the stock market?

    Read about some of the types of adverse selection in the stock market, whether that includes insider trading, and how intermediaries ... Read Answer >>
  5. Is it possible to have a credit limit that's too high?

    Avoid these pitfalls when working with high credit limits, and learn how to increase your credit score by increasing your ... Read Answer >>
  6. What's the difference between a credit rating agency and a credit bureau?

    Learn how to differentiate between credit rating agencies and credit bureaus, two industries that distribute valuable risk ... Read Answer >>
Trading Center