Your credit report contains sensitive information about you. In the wrong hands – this information can be used in fraudulent ways and cause havoc in your financial matters.
Fortunately, the Fair Credit Reporting Act (FCRA) specifies who can access your credit report and for what purposes. All of the three major credit bureaus disclose your credit report only to organizations who meet these criteria.
The FCRA states that a company must have a “permissible purpose,” (i.e. a legitimate reason) to access your credit report. Any individual or organization who obtains a copy of your credit report under false pretenses can be fined and jailed for up to a year.
The FCRA defines a list of “permissible purposes” that includes the following:
- As part of a credit transaction involving the consumer
- To determine whether the consumer continues to meet the terms of the account
- To review and collect the consumer’s account
- For employment purposes (only with the consumer’s written consent)
- For insurance underwriting purposes
- Government agencies for determination of consumer’s eligibility for a license or other governmental benefit
- A court order or Federal Grand Jury Subpoena
This means that the following type of organizations can ask to be granted access to your credit report:
- Lenders, creditors, credit card companies and retailers (when you apply for a loan, line of credit or a credit card).
- Insurance companies (when you apply for insurance).
- Landlords (when you request to rent an home).
- Companies that you are seeking employment with (only partial information, and only with your written consent).
- Government agencies (limited access only).
- Any other organization you are financially associated with.
Any time an organization receives a copy of your credit report – the fact is noted in your ‘inquiries’ section of your credit report, and influences your credit score. See “Hard Inquiries” and FICO Score Rating Formula for more information.