What is a Consumer Reporting Agency (CRA)?

• A. A bank's marketing division
• B. A state government office
• C. A credit card company
• D. An entity that compiles and maintains consumer credit information and provides reports to lenders

Answer: (D)

A consumer reporting agency is an organization that collects and maintains information about consumers’ credit histories from lenders and other sources, and then provides credit reports to lenders and other parties with a permissible purpose. This role is why the option describing an entity that compiles and maintains consumer credit information and provides reports to lenders is the best fit. Examples include the big national CRAs like Experian, Equifax, and TransUnion, which compile data and generate reports used in underwriting loans and assessing creditworthiness.

The other choices don’t fit because a bank’s marketing division focuses on promoting products, not compiling credit histories; a state government office isn’t in the business of collecting and reporting consumer credit data; and a credit card company is a lender that issues credit and may supply data, but it doesn’t function as a reporting agency that provides third-party credit reports.