What is the effect of an adverse action notice on the customer's credit report?

An adverse action notice has no direct impact on a customer's credit score because it serves primarily as a notification to the customer about a decision based on their credit report or score, not an action that alters the score itself. This notice informs the individual that they have been denied credit or received less favorable terms due to the information found in their credit report.

While the actions leading to the issuance of an adverse action notice might stem from a low credit score or negative marks on a credit report, the notice itself does not directly change those scores or marks. Thus, while it may indicate that the credit report influenced a credit decision negatively, it does not affect the score calculation or remove any existing negative records. Instead, it acts as a transparency measure, allowing customers to understand why a credit decision was made against them.