Fair Credit Reporting Act (FCRA) Practice Test

The scenario described involves checking a father-in-law's salary, which is not a compliant use of a credit report under the Fair Credit Reporting Act (FCRA). The FCRA establishes specific permissible purposes for accessing a consumer's credit report, which primarily revolve around creditworthiness, employment, insurance underwriting, and certain other defined contexts related to the consumer's financial transactions.

Using a credit report to ascertain the salary of someone who is not the consumer being evaluated goes beyond the intentions of the FCRA. It emphasizes the need for consent and a legitimate reason for accessing the credit report, and checking the income of a relative does not meet those criteria. The act aims to protect consumer information from being disclosed for purposes that do not directly relate to the consumer's financial obligations or interests.

In contrast, options such as checking for judgments, liens, or bankruptcies, determining whether the consumer is employed, and verifying the accuracy of the consumer's address fall within the acceptable uses of credit reports as they are related to evaluating the consumer's financial reliability and identity verification. Even though employment verification is a bit nuanced, as employers typically need to obtain explicit consent, it remains on the permissible uses if it is done as part of a background check with appropriate permissions.