A lender is not allowed to use the applicant's health status when making credit decisions. Is this statement true or false?

• A. True
• B. False
• C. Only if the applicant consents in writing
• D. Only for medical loans

Answer: (B)

In evaluating whether to extend credit, lenders look at factors that affect whether you can repay. Health information can be relevant because a medical condition can impact future income, employment stability, or medical expenses. Because of that potential impact on repayment, a lender may consider health status as part of the underwriting process. The statement that health status cannot be used is therefore not correct.

At the same time, health information must be handled with privacy in mind and should not be used to blanketly deny credit or to discriminate against someone solely because of a medical condition. It should be used only if it meaningfully relates to the ability to repay and in a manner consistent with applicable laws.