An MLO obtains a credit report for a borrower's mortgage application using the permissible purpose of 'credit transaction.' The borrower is denied, but asks the MLO to reconsider based on a co-signer. To evaluate the co-signer's creditworthiness, the MLO:
Correct Answer
B) Must obtain new authorization from the co-signer for their credit report
Under FCRA Section 604, each consumer must provide separate authorization for their credit report to be obtained. A co-signer is a different consumer who requires their own permissible purpose authorization, even if they're being added to an existing transaction.
Why This Is the Correct Answer
Under FCRA Section 604, each consumer must provide separate authorization for their credit report to be obtained. A co-signer is a different consumer who requires their own permissible purpose authorization, even if they're being added to an existing transaction.
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A mortgage company sends an adverse action notice that includes all required FCRA elements but fails to include the numerical credit score. The company claims they don't provide credit scores in adverse action notices as a matter of policy. This practice is: