In which of the following circumstances may a CRA report negative credit information that is more than 7 years old?

Negative credit information generally cannot be reported after seven years, as outlined in the Fair Credit Reporting Act (FCRA). However, there are specific situations in which a credit reporting agency (CRA) may report negative information beyond that time limit.

In the case of applying for a life insurance policy with a value of $500,000, this situation qualifies as one where a CRA can report negative credit information that is older than seven years. The FCRA allows for the reporting of negative information for life insurance policies if the amount is over a certain threshold, which is typically significant—$150,000 or more is generally acceptable. This provision is designed to allow issuers to assess the risk associated with insuring an applicant who might have a history of financial difficulties.

The other scenarios, while they may involve significant loan amounts or income expectations, do not meet the specific criteria outlined in the FCRA for the reporting of negative information beyond the standard seven-year limit. Hence, the reporting can only be extended for life insurance applications of substantial value, validating that option as the correct answer.