The MLO compares the file facts with FCRA Credit Score Disclosure during an underwriting condition review. Which conclusion is accurate?

Correct Answer

A) Use the report only for a permissible credit purpose

Why this is correct: The Fair Credit Reporting Act (FCRA) and its implementing Regulation V strictly govern the use of consumer reports, including credit scores. The core principle is that a consumer report can only be obtained and used for a "permissible purpose" as defined by law, such as a credit transaction initiated by the consumer. The MLO's duty during an underwriting review is to ensure the credit report is used solely for the legitimate purpose of evaluating the applicant's creditworthiness for the mortgage. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because internal policies cannot override federal FCRA requirements for permissible purpose and proper disclosure. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because compliance with FCRA is mandatory at the time of use, not contingent on a regulatory inquiry. "Resolve the FCRA Credit Score Disclosure issue with the credit underwriting exception that does not fit the facts" is wrong because applying an exception that doesn't match the situation is improper and does not correct the underlying FCRA compliance failure. Exam tip: Remember the FCRA's central rule: no permissible purpose, no access. Your permissible purpose is typically the consumer's application for credit.