Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

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

1. To provide loans to consumers

2. To protect the privacy of background information

3. To eliminate all credit scores

4. To ensure high-interest rates for borrowers

The correct answer is: To protect the privacy of background information

The Fair Credit Reporting Act (FCRA) was enacted primarily to protect consumers' privacy with regards to their credit information. It governs how consumer reporting agencies collect, manage, and disclose information about individuals’ credit histories. The act provides consumers with rights to access their credit reports, request corrections, and understand how their data is used by lenders and other entities. This law ensures that personal information is handled responsibly and promotes accuracy, fairness, and the privacy of individuals' credit information. The other options do not align with the central tenets of the FCRA: providing loans is not a focus of the Act, which is more concerned with reporting practices; eliminating all credit scores would contradict the purpose of credit reporting; and ensuring high-interest rates runs counter to the consumer protections intended by the Act. The main goal remains the protection of consumer privacy in regards to background and credit information, making the chosen answer precise and relevant.