What is the purpose of the Fair Credit Reporting Act (FCRA)?

• A. To ensure accuracy and privacy of consumer credit info
• B. To restrict mortgage lending in high-risk areas
• C. To regulate debt collection practices
• D. To guarantee free credit reports for all consumers

Answer: (A)

The main idea is to protect consumer privacy while ensuring the information used for credit decisions is accurate and reliable. The Fair Credit Reporting Act sets who can access a consumer’s credit report and for what legitimate purposes, requires consent in many situations, and gives individuals the right to review and dispute information in their file. If something is wrong, the credit bureau must investigate and correct errors, and furnishers of information must report accurately and promptly. It also allows consumers to obtain a free copy of their credit report from the major bureaus once a year, helping people spot and fix mistakes. This combination of privacy protections and accuracy safeguards is why the purpose is best described as ensuring the privacy and accuracy of consumer credit information. The other options don’t fit: the act isn’t aimed at restricting mortgage lending in high‑risk areas, nor is it primarily about debt collection practices, and while it does authorize annual free reports, it doesn’t guarantee free reports for everyone at all times.