Denying a Rental Application: Adverse Action Notices in California
When a rental application is denied based in whole or in part on information in a consumer report, the federal Fair Credit Reporting Act (15 U.S.C. § 1681m(a)) and California's Consumer Credit Reporting Agencies Act (Civil Code § 1785.20(a)) both require an adverse action notice with set contents, and the California notice must be in writing. If an investigative consumer report was obtained, Civil Code § 1786.40(a) adds its own notice, and separately Civil Code § 1950.6(f) requires a copy of the credit report within 7 days of the landlord receiving it whenever a screening fee was paid.
The short version
- A denial counts as adverse action under both laws; California's definition expressly covers "an application for the hiring of a dwelling unit" (Civil Code § 1785.3(a)(3)).
- One written notice can be drafted to cover the federal and California contents together.
- The FTC's landlord guidance also treats requiring a co-signer, a larger deposit or higher rent than for another applicant as adverse action.
- The FCRA and CCRAA notice sections set no deadline in days; sending the notice with the decision is the practical choice.
- The credit report copy under § 1950.6(f) is separate, automatic and due within 7 days of receiving the report.
When a notice is needed
The FCRA notice duty applies when "any person takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report" (15 U.S.C. § 1681m(a)). The federal definition of adverse action includes a determination made in connection with an application by a consumer that is adverse to the consumer's interests (§ 1681a(k)(1)(B)(iv)).
California's version applies to any person who takes adverse action "based, in whole or in part, on any information contained in a consumer credit report" (Civil Code § 1785.20(a)), and its definition of adverse action names rental applications directly (§ 1785.3(a)(3)).
Common situations that call for a notice:
| Situation | Notice? |
|---|---|
| Application denied, and a credit or screening report played any part | Yes, under § 1681m(a) and § 1785.20(a) |
| Approved only with a co-signer, a larger deposit or higher rent than another applicant, based on a report | Treat as adverse action, per FTC guidance |
| Denied for a reason unrelated to any report | § 1681m(a) and § 1785.20(a) are not triggered (see the next row if an investigative report was obtained); keep a record of the reason |
| An investigative consumer report was obtained and the application was denied or the charge increased | Yes, also under § 1786.40(a), whether or not the report was the basis |
Whether a particular vendor's report is a consumer credit report, an investigative consumer report, or both depends on its contents, so plan for both sets of rules.
What the notice must contain
| Element | Federal (15 U.S.C. § 1681m(a)) | California (Civil Code § 1785.20(a)) |
|---|---|---|
| Form | Oral, written or electronic | Written |
| Notice of the adverse action | Required | Required |
| Agency details | Name, address and phone number of the reporting agency, with a toll-free number if it is a nationwide agency | Name, address and phone number of the agency |
| Statement about the decision | The agency did not make the decision and cannot give the specific reasons | The decision was based in whole or in part on information in a consumer credit report |
| Free copy of the report | Right to a free copy from that agency, with an indication of the 60-day period | Right to obtain within 60 days a free copy from that agency and from any other nationwide agency |
| Right to dispute | Right to dispute accuracy or completeness with the agency | Right to dispute accuracy or completeness under § 1785.16 |
| Credit score | If a numerical credit score was used, disclose it with the range of possible scores, up to 4 key factors that hurt it, the date it was created, and who provided it (§ 1681m(a)(2); § 1681g(f)(1)) | Not listed in § 1785.20(a) |
Because California requires a written notice, an oral notice alone does not meet the state rule. A single written notice that includes every item in both columns covers both.
Investigative consumer reports (ICRAA)
An investigative consumer report is one that gathers information on a person's character, general reputation, personal characteristics or mode of living (Civil Code § 1786.2). If you obtained one, the ICRAA adds three duties at different points:
- When ordering: notify the applicant in writing no later than three days after first requesting the report, stating that it will be made, the agency's name and address, and a summary of Civil Code § 1786.22 (§ 1786.16(a)(3)).
- Copy on request: give the applicant a form with a box to check to request a copy. If checked, send the copy within three business days of receiving the report (§ 1786.16(b)(1)).
- On denial or a higher charge: advise the applicant that the rental was denied or the charge increased, and give the agency's name and address (§ 1786.40(a)).
How to send the notice, step by step
- Record the reason first. Write down which criteria were not met and whether any consumer report contributed.
- Send the § 1950.6(f) copy if you have not already. If a screening fee was paid, the credit report copy is due within 7 days of your receiving the report, by personal delivery, mail or email, whether or not the applicant asked.
- Fill in a written notice with every element in the table above, using the agency details from the report itself.
- Add the score disclosure if a numerical credit score was used in the decision.
- Add the ICRAA statement if an investigative report was obtained.
- Deliver it with the decision. No statute covered here sets a deadline in days, so the practical choice is to send the notice at the same time you communicate the decision.
- Keep a copy with the application file, then dispose of the reports securely. The FTC's Disposal Rule requires anyone who keeps consumer report information for a business purpose to take reasonable measures against unauthorized access when disposing of it (16 CFR § 682.3(a)).
Both laws give a defense to a user who shows it "maintained reasonable procedures to assure compliance" (15 U.S.C. § 1681m(c); Civil Code § 1785.20(c)). Using the same written checklist on every file is a practical way to keep your procedures consistent. This page does not cover penalty amounts under these laws.
For the full screening sequence, see tenant screening step by step. The fee and report-copy rules are on the application and screening fees law page, and the rules on what a denial may and may not be based on are on fair housing and source of income.
Rules that do not cover rental denials
The federal and California rules that require disclosing "the nature of the information" when a decision rests on information from someone other than a reporting agency are written for credit or insurance: 15 U.S.C. § 1681m(b)(1) covers credit, Civil Code § 1785.20(b) covers credit or insurance, and § 1786.40(b) covers insurance only. By their text, 15 U.S.C. § 1681m(b)(1), Civil Code § 1785.20(b) and § 1786.40(b) do not extend that duty to rental denials. A short, factual reason tied to your written criteria still helps the applicant and your records.
For owners
Build one written template that covers the federal, California and ICRAA items, and fill in the agency details from each report. If your criminal-history policy offers applicants a chance to respond before a final decision, send that invitation before the adverse action notice; see criminal history in tenant screening. Use it for conditional approvals based on a report too.
For renters
If a report played a part in a denial, you should get a written notice naming the agency and explaining your right to a free copy within 60 days and to dispute errors. If you paid a screening fee, you should already have a copy of your credit report within 7 days of the landlord receiving it. The Coronado guide to applying for a rental has tips for your next application.
Local rules
Some cities add rules on top of state law, such as local just-cause, relocation or rental registration requirements; check your city's code. Coronado has no local rent-control or just-cause ordinance as of October 2026 (based on a review of its code's contents).
Frequently asked questions
Is a landlord required to tell me why my rental application was denied?
If a consumer report contributed to the denial, the landlord must send an adverse action notice naming the reporting agency, stating that the decision was based in whole or in part on the report, and explaining your right to a free copy and to dispute it (15 U.S.C. § 1681m(a); Civil Code § 1785.20(a)). The request-for-reasons rules for information from other sources cover credit and insurance by their text, not rental denials.
Can a California landlord give an adverse action notice by phone?
Federal law allows oral, written or electronic notice, but California's § 1785.20(a) requires written notice. A written notice that includes both sets of contents meets both laws.
How long does a landlord have to send an adverse action notice?
Neither the FCRA nor the CCRAA sets a deadline in days in the text covered here. The fixed periods are different: the § 1950.6(f) credit report copy within 7 days of the landlord receiving the report, the ICRAA notice within three days of ordering an investigative report, and the applicant's 60 days to request a free copy.
Is approving me with a co-signer an adverse action?
The FTC's guidance for landlords lists requiring a co-signer, requiring a larger deposit than for another applicant, and charging higher rent than for another applicant as examples of adverse action, so a landlord who does so based on a report should send the notice.
Do I get a copy of my credit report even if I am approved?
Yes, if you paid a screening fee. Section 1950.6(f) requires the landlord to provide a copy of the consumer credit report within 7 days of receiving it, whatever the outcome and without a request.
This is general information, not legal advice. Laws change; confirm the current text and your situation with a California attorney.
McKee Properties manages rentals from its Coronado office; contact us with questions about your property.
Sources
- 15 U.S.C. § 1681m (opens in a new tab)
- 15 U.S.C. § 1681g (opens in a new tab) and 15 U.S.C. § 1681a (opens in a new tab)
- Civil Code § 1785.3 (opens in a new tab)
- Civil Code § 1785.20 (opens in a new tab)
- Civil Code § 1786.2 (opens in a new tab)
- Civil Code § 1786.16 (opens in a new tab)
- Civil Code § 1786.40 (opens in a new tab)
- Civil Code § 1950.6 (opens in a new tab)
- 16 CFR part 682 (Disposal Rule) (opens in a new tab)
- FTC, Using Consumer Reports: What Landlords Need to Know (opens in a new tab)
Verified October 19, 2026.
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