An MLO obtains a credit report for a borrower who applied for a mortgage loan. Three months later, the same borrower applies for a home equity loan with the same lender. Regarding the credit report:
Correct Answer
B) A new credit report must be obtained for the new application
Under FCRA, each credit inquiry requires a permissible purpose. A new loan application constitutes a separate transaction requiring a new permissible purpose and typically a fresh credit report to ensure current information.
Why This Is the Correct Answer
Under FCRA, each credit inquiry requires a permissible purpose. A new loan application constitutes a separate transaction requiring a new permissible purpose and typically a fresh credit report to ensure current information.
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