Adverse Action Background Check Process: A Guide for Employers & Property Owners
Updated: Aug 25
When a background check or tenant screening report may influence a decision, the process matters just as much as the report itself.
For employers, the Fair Credit Reporting Act (FCRA) requires specific steps before and after an adverse employment decision based in whole or in part on a consumer report. Property owners and managers using tenant screening reports must also follow applicable FCRA notice requirements, as well as federal, state, and local housing rules.
Global Background Screening (GBS) makes the notice process easier. From your dashboard, click “Initiate Adverse Action” to have GBS send the appropriate pre-adverse action on the applicant and, if you later confirm a final decision, adverse action notices—at no additional cost.
GBS documents the process with time stamps, shows whether the applicant has viewed the notice, relays applicant responses, provides the applicant with a copy of the report and their rights, and rechecks disputed report information free of charge. The employer or property owner always remains the decision-maker.
What Is Adverse Action?
An adverse action is a negative decision based in whole or in part on information in a consumer report. Examples may include:
Deciding not to hire an applicant
Rescinding a conditional job offer
Denying a promotion, reassignment, or continued employment
Denying a rental application
Requiring a higher deposit, guarantor, or other less favorable rental term because of a screening report
A report with a record, discrepancy, credit concern, or other flagged item does not automatically mean adverse action is appropriate. The client must review the information and make a lawful, individualized decision under the rules that apply to the position or housing decision.
GBS provides consumer reports and supports the notice workflow. GBS does not decide whether someone should be hired, promoted, retained, approved for housing, or denied housing.
The Employment Adverse Action Process Under the FCRA
When an employer may take adverse action based on an employment background check, the FCRA requires a two-stage process.
1. Send a pre-adverse action notice
Before making a final employment decision, the employer must give the applicant or employee:
A pre-adverse action notice
A copy of the consumer report relied upon
A copy of the Summary of Your Rights Under the Fair Credit Reporting Act
This gives the individual an opportunity to review the report, dispute inaccurate information, and provide context before the decision becomes final. See the FTC’s employer guidance on consumer reports.
2. Allow a reasonable opportunity to respond
The FCRA does not prescribe one universal waiting period. Employers must allow a reasonable opportunity for the individual to review the information and respond before finalizing an employment decision.
State and local laws, fair-chance rules, union agreements, or internal policies may require a specific process or timeline. Do not treat a generic timeline—or an automated “pass” or “fail” setting—as a substitute for the rules that apply to your organization.
3. Send a final adverse action notice, if you make the decision
If the employer makes a final adverse decision based in whole or in part on the report, the applicant must receive a final adverse action notice. The notice generally identifies the consumer reporting agency, explains that GBS did not make the decision, and explains the applicant’s right to dispute information and request another copy of the report within the applicable period.
Tenant Screening and Adverse Action
Landlords, property managers, and housing providers using tenant background checks should also use a documented adverse action process when a consumer report affects a rental decision or terms.
The FCRA may require an adverse action notice when a tenant screening report contributes to a denial or unfavorable decision. State and local housing laws may add separate requirements involving criminal records, credit information, eviction records, individualized review, notice language, timing, or permissible rental criteria.
GBS can support the notice-delivery process for rental screening decisions. However, the property owner or manager remains responsible for the final decision and for complying with all applicable fair housing, state, and local requirements.
How GBS Handles the Adverse Action Workflow
GBS gives clients a simple, documented way to manage the communication process.
Step 1: Review the completed report
Review the completed report in your secure GBS dashboard. If you are considering an adverse decision based in whole or in part on report information, do not make the decision final yet.
Step 2: Click “Initiate Adverse Action”
Select “Initiate Adverse Action” from the report. GBS starts the notice workflow for you at no additional charge.
Step 3: GBS sends the pre-adverse action notice
GBS sends the applicant the pre-adverse action notice along with:
A copy of the report
A copy of the applicant’s FCRA rights
Information on how to dispute inaccurate or incomplete report information
Step 4: GBS records delivery and viewing activity
Your dashboard provides a time-stamped record of the process. You can see when notices
are sent and whether the applicant has viewed them. This creates a clearer audit trail for your files.
Step 5: Applicant responses are shared with you
If the applicant submits a response, explanation, or dispute, GBS provides it throughout the process so you can review it before making a final decision.
If the applicant disputes report information, GBS will recheck the challenged information free of charge. A report should not be treated as final if information may be inaccurate or incomplete.
Step 6: You make the final decision
After the appropriate review period and any required reconsideration, the employer or property owner decides whether to move forward.
That decision belongs to you—not GBS. We do not tell clients to hire, decline, approve, deny, terminate, or impose a rental condition.
Step 7: GBS sends the final adverse action notice
If you confirm a final adverse decision, GBS can send the final adverse action notice and document the communication in the dashboard.
What Applicants Receive Through the GBS Process
A fair process means the applicant can understand what information may affect them and has a chance to raise an issue.
Through the pre-adverse action process, the applicant receives:
A copy of the consumer report used in the decision process
A copy of the Summary of Rights under the FCRA
A way to dispute report information
A way to submit a response or explanation
A documented communication trail
Applicants can also visit Applicant Report Requests & Disputes for information about requesting a report or disputing information furnished by GBS.
Do Not Rely on Automatic Disqualification Rules Alone
A screening report is a decision-support tool—not an automatic hiring or housing decision.
Employers should avoid blanket exclusions that fail to consider the role, the nature of the information, the time that has passed, rehabilitation information, and applicable federal, state, and local rules. The EEOC explains that an employer’s use of arrest and conviction records can create Title VII risk in certain circumstances. Review the EEOC’s enforcement guidance on arrest and conviction records.
Property owners should likewise avoid using a screening result without reviewing applicable housing laws and local rental-screening restrictions.
Frequently Asked Questions
Does GBS charge for adverse action notices?
No. GBS can send pre-adverse action and final adverse action notices through the dashboard at no additional cost.
Does GBS make the hiring or rental decision?
No. GBS is a consumer reporting agency. We provide the report, notice workflow, time stamps, applicant communications, and rechecks. The employer or property owner makes the final decision.
Does GBS provide the applicant with a copy of the report and their rights?
Yes. When the pre-adverse action process is initiated, GBS provides the applicant with the report and applicable FCRA rights information.
What happens if the applicant disputes information?
GBS will recheck the disputed report information free of charge and provide the applicant’s response or dispute information throughout the process. The client should consider the updated information before making a final decision.
Is there one required waiting period for every adverse action decision?
No. The FCRA does not state one universal waiting period for employment pre-adverse action. The appropriate timeline may depend on the facts, applicable state or local law, and your organization’s policy. Housing-related requirements can also vary by jurisdiction.
Use a Documented Process Without Giving Up Control
GBS helps employers and property owners manage the communication and documentation behind adverse action—without taking over the decision.
Order secure employment background checks or tenant screening services online, then use “Initiate Adverse Action” in your dashboard whenever report information may lead to an adverse decision.
For broader compliance information, visit Background Screening Compliance and review the GBS FCRA Compliance Agreement.
This article is for general informational purposes and describes the GBS workflow. It is not legal advice. Employers and property owners should consult qualified counsel regarding FCRA, fair housing, fair-chance, privacy, and state or local requirements that apply to their decisions.
Last updated: August 25, 2026.
