Which of the following is an adverse action stemming from credit evaluation made based on the issue of a consumer report to a lending institution?

Prepare for the Maryland Title Insurance Test with targeted multiple-choice questions, including hints and explanations for each to help you succeed. Get ready to ace your exam!

Denying credit is considered an adverse action stemming from the evaluation of a consumer's credit as it directly affects the consumer's ability to access funds. When a lending institution reviews a consumer report and decides to deny credit, it implies that the consumer did not meet the necessary criteria for approval based on their creditworthiness as assessed in the report.

This decision is a clear negative consequence for the consumer, as it restricts their financial options and can impact their financial plans. Understanding that an adverse action is any action taken by a creditor that negatively impacts a consumer’s ability to secure credit is essential in interpreting the results of a credit evaluation.

Other options, such as increasing the credit line or determining interest rates, do not negatively impact the consumer's access to credit, and asking the consumer for more information typically indicates that the lender is seeking to clarify or verify details rather than making an adverse decision.

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