Understanding Who Can Pull Your Credit Report Legally

Your credit report contains a great deal of personal information about you, including your social security number and a record of your accounts and debts. This is information you certainly don’t want in the wrong hands, and it’s not something you want to give out unless necessary.The good news is there are many federal laws governing who has legal access to your credit file. The federal Fair Credit Reporting Act (FCRA) mandates regulations and rules for the entire credit reporting industry, and it protects your private information by restricting access to your credit report to only those who have what’s known as “permissible purpose” to perform a credit inquiry.Who Can Access My Credit Report?The FCRA offers clear outlines about their rules regarding who may access your credit file and why. The following entities can legally pull your credit file.Credit card companies and banksBoth banks and credit card companies both make money by loaning money to consumers and charging interest on these loans. If you apply for a loan or credit, the lender may review your credit file to determine your creditworthiness and likeliness to repay the debt. They will also use the information in your credit report to assign you a certain interest rate based on your risk level in a process called price-based risk assessment.It’s important to note that lenders may ask your permission prior to pulling your credit file, but they are not legally obligated to do so.Debt collectorsAs your credit file contains your most recent known address and previous addresses, a debt collector may pull your credit report during the skip-tracing process if they can’t find you. They may also perform credit inquiries to evaluate your assets and decide if you’re a good candidate for a lawsuit for the unpaid debt. Like credit card companies and banks, debt collection agencies (Dynamic Recovery Solutions and Allied Interstate)have a permissible purpose to acces your credit information and they are not required to obtain your permission.LandlordsWhile not all landlords check credit prior to renting a home or apartment, this is standard procedure. Landlords have reason to check your credit file to make sure you can pay your debts, as renters who pay other creditors in a timely manner are more likely to pay their rent on time.Landlords will look for any past evictions you have on your credit report, as evictions are public record and appear on your credit file for up to 7 years. A previous eviction will be a red flag to landlords, even if you pay debts on time, and it could impact your ability to get approved to rent.Prospective EmployersIf you’re searching for a new job, understand that more prospective employers than ever review applicants’ credit information prior to making a hiring decision. Employers have various reasons to conduct a credit inquiry, as some may be interested to see how you have paid your debts to indict how responsible you will be at your job. Others may want to see your debt level, which may indicate if you are a theft risk.Unlike credit card companies, debt collection companies and lenders, prospective employers must obtain written permission prior to pulling your credit report. They also receive a limited version of your credit file. If they decide not to hire you based on information on your credit report, they must notify you of this fact and notify you of your federal right to obtain a free credit report based on adverse action.Other Permissible PurposesAlong with the reasons above, there are also reasons your credit file may be accessed. You don’t have to provide permission to have your credit report accessed, and it is legal for a company to pull your information without written permission if their reason is permissible according to the FCRA. The following are additional reasonable purposes:• Child support• Legitimate business needs• License eligibility• Court order• Insurance underwritingTo prevent companies from accessing your credit information, do not provide your social security number, birth date, name or address, as this information is necessary to pull your file.Reviewing Your Own Credit ReportThe FCRA grants you the right to one free credit report every 12 months from each of the three credit bureaus (TransUnion, Equifax and Experian). In some states, such as California, residents are provided with two free reports annually. Take advantage of this to look for any mistakes on your credit report that may impact your ability to get credit and work to fix them by notifying the credit bureaus.The FCRA also prohibits credit bureaus from releasing your credit information to any persons or companies that do not have a permissible purpose to see it. If this happens, you have the right to file a lawsuit against the person or company that requested your information without permission.