In the context of consumer reports, negative information typically refers to information such as late payments or defaults. True or False?

• A. True
• B. False
• C. It only refers to bankruptcies
• D. It only refers to collection accounts

Answer: (A)

Negative information in a consumer report encompasses adverse items that reflect past credit problems. Late payments and defaults are classic examples and immediately indicate higher credit risk. In practice, negative information also includes collections, charge-offs, bankruptcies, judgments, and accounts sent to collection agencies. The statement is true because late payments and defaults are typical forms of negative information found in consumer reports. The other options are too narrow—they imply negative information is limited only to bankruptcies or only to collection accounts, which isn't the case.