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Adverse action is a creditor’s action refusing a credit application. A creditor refuses the terms of the application or refuses due to the termination or changes in the account. In case of refusal, a creditor must provide the applicant an adverse action notice to the applicant under Equal Credit Opportunity Act. Adverse action notice is a document explaining the reasons for creditor’s denial for an application. The notice advises a credit applicant or existing debtor of the denial of their request for credit.
The notice must include: