When declining an applicant who does not meet your credit score requirements or has issues on there credit that raise red flags do you have to send them special notification or would a standard phone call letting them know be sufficient.  The service I use to obtain this information automatically provides them with a copy of the report.

You need to send them a letter in the mail.  A lot of times the company you use to run the credit check will have a canned letter you can use.  Look up adverse action letter.