Which statement about the Fair Credit Reporting Act is TRUE?

The Fair Credit Reporting Act (FCRA) is designed to promote the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. One of the key tenets of the FCRA is that consumers have certain rights regarding their credit information and how it is used by entities, including insurers.

The correct statement is that an insurer does not need to discuss credit history inconsistencies with the applicant. This means that while insurers can utilize information from credit reports in their decision-making processes, they are not legally required to explain inconsistencies or specific details regarding the applicant's credit history. The FCRA does stipulate that consumers have a right to know what information is in their credit report and to dispute inaccuracies, but it does not obligate insurers to engage in a dialogue about inconsistencies before a decision is made regarding the application.

In contrast, the law imposes other obligations on insurers, such as notifying applicants when an application is denied based on information in a credit report, informing them of the scope of any investigation conducted, and disclosing that an investigation is taking place. These requirements are in place to ensure transparency and give consumers the opportunity to address any potential issues in their credit history.