What is a consumer reporting agency (CRA) as used in FACT Act terminology?

• A. A bank that holds customer deposits.
• B. A government agency that regulates credit.
• C. An entity that compiles and furnishes information about a consumer's creditworthiness, credit history, or other personal characteristics used to evaluate credit or employment.
• D. A marketing firm that analyzes consumer buying behavior.

Answer: (C)

A consumer reporting agency is an entity that regularly collects and maintains information about a consumer’s creditworthiness, credit history, or other personal characteristics and furnishes that information to lenders, employers, or other users to evaluate credit or employment opportunities. These agencies gather data from lenders, public records, and other sources, compile credit reports, and provide them (often along with credit scores) to third parties who use them to assess risk or make decisions about credit, hiring, or housing. This role is distinct from a bank that holds deposits, a government regulator, or a marketing firm that analyzes buying behavior, none of which function as CRAs. Examples include the major credit bureaus that compile and furnish credit histories to lenders.