What information is included in an Adverse Action Notice?

An Adverse Action Notice is a document that lenders are required to provide when they decide not to extend credit or to take another adverse action against a borrower. The correct choice highlights that the notice must include specific details regarding the loan request and the reasons for its denial. This is essential for transparency and helps the borrower understand why their application was rejected, which can allow them to address any issues or improve their financial situation for future applications.

The inclusion of specific reasons for denial is also mandated by the Equal Credit Opportunity Act (ECOA), ensuring that the process is fair and that borrowers have a clear understanding of what factors contributed to their credit decision. This requirement aids in consumer protection and promotes accountability among lenders.

The other choices do not align with the primary purpose of the Adverse Action Notice. While having a borrower’s credit score history and general lending practices may be relevant to the overall lending process, they are not requirements for what must be disclosed in the notice itself. Similarly, new loan offers from other creditors are not relevant to the notice's intent, which focuses specifically on the rejection of a credit application rather than alternative offers.