Under FCRA, which statement is true about accuracy and permissible purposes for reports?

• A. Only consumer reports are subject to accuracy requirements.
• B. Accuracy and permissible purposes apply to both consumer and commercial credit reporting.
• C. Only commercial reports require permissible purposes.
• D. Neither type is subject to accuracy standards.

Answer: (B)

Under the FCRA, the information used to evaluate creditworthiness must be reliable and used for a legitimate, allowed purpose. The rules require that consumer reporting agencies maintain accuracy and follow procedures to correct inaccuracies, as well as that a report be used only for permissible purposes. This isn’t limited to reports about individuals; it also extends to commercial (business) credit reporting, where lenders rely on reports to decide whether to extend credit to a business. So accuracy and permissible purpose requirements apply to both types of reports, ensuring that either a consumer or a business is evaluated based on correct information and for a rightful reason.