What must a credit union provide loan applicants if credit scores are used in mortgage loan decisions?

When credit scores are used in mortgage loan decisions, it is required for the credit union to provide a notice to home loan applicants that includes their credit score. This requirement is in line with regulations set forth by the Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA). The purpose of providing this notice is to ensure transparency and inform applicants about the specific credit score that was used in the decision-making process.

This information allows applicants to understand the factors influencing their loan eligibility and terms. It also serves as an opportunity for consumers to take action if they find inaccuracies in their credit report or score, which could affect their ability to secure a mortgage.

In contrast, the other options do not fulfill the regulatory requirements set for mortgage loan applications. A loan agreement is a document signifying acceptance of loan terms, but it does not provide any information about the credit score used. A detailed explanation of the loan terms is important but is not directly related to the usage of credit scores in decision-making. An application for a loan is necessary for the process but does not pertain to disclosing credit score information.