Fair And Accurate Credit Transactions (FACT) Act Practice Exam

What is a permissible purpose to access a consumer report under FACTA?

A valid reason to access a consumer report for marketing purposes A reason to access a consumer report for evaluating a credit or employment application A valid reason to access a consumer report for checking a neighbor's credit A reason to access a consumer report solely for entertainment

Correct Answer:

A valid reason to access a consumer report for checking a neighbor's credit

Explanation:

Access to a consumer report is allowed when there is a legitimate reason to use it, such as evaluating an individual's application for credit or employment. This is a clear, proper permissible purpose under FACTA/FCRA, because lenders and employers rely on these reports to make informed decisions about extending credit, hiring, or other related actions. The other choices don’t fit the permissible purposes. Checking a neighbor’s credit or using a report for entertainment would violate the privacy protections of the FCRA. Marketing can be permissible only if the consumer has given prior express written consent for the report to be used for marketing; without that consent, it’s not a valid permissible purpose.

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