Credit

Who Has Access to My Credit Reports?

What You Need to Know About the New VantageScore Credit Reporting Model

Each of the three major credit reporting agencies, Experian, TransUnion and Equifax, maintain well over 200 million credit files on individual consumers.

One of the ways they make money is by selling your credit report. But, Federal law strictly limits access to your credit reports.

The Fair Credit Reporting Act (”FCRA”), which is over 40 years old, defines under what conditions the credit reporting agencies may disclose your credit reports.

These conditions are legally referred to as “Permissible Purposes.”

If a Permissible Purpose does not exist it would not be legal for a credit-reporting agency to disclose your credit report.

But, as you’ll see it’s not that hard for a legitimate purpose to exist.

The Permissible Purposes Are:

If You Want A Copy Of Your Own Credit Report

This is commonly referred to as a consumer disclosure.

You have the right to request a copy of your credit report as often as you like, for whatever reason.

You may have to pay for it, but you always have a right to see it.

Court Order

I do a ton of credit related expert witness work so I see this all the time.

If a court orders the credit reporting agencies to disclose a credit report then that’s a permissible reason under Federal law.

To Facilitate a Credit Related Transaction

You probably didn’t need me to tell you this but when you apply for credit the credit reporting agencies can disclose a copy of your credit report to the lender.

And, no, your signature is not required. That’s a myth.

For Employment Screening Purposes

Unlike a credit transaction, your signature is required if your current or prospective employer wants to pull your credit report.

This particular permissible purpose is the root of the most common credit related myth, which is that employers have access to your credit scores.

That isn’t true. They have access to your credit reports. Big difference.

There are some states that restrict access to credit reports to only certain types of job functions but at a Federal level it’s still 100% legal for any employee.

For Insurance Underwriting Purposes

Insurance companies are allowed to pull your credit reports to determine if they want to do business with you and at what premiums.

There are some minor differences in the credit reports they get versus those that a lender would get, but not much.

To Determine Capacity to Make Child Support Payments

I never get much of an argument for this one.

Your credit report can be used to determine how much you can afford to pay in child support.

To Assist With Debt Collection

I always get an argument for this one but the law is the law.

Collection agencies are allowed to pull credit reports, without your permission, to help them collect debts.

They can use the credit reports to get your address and to determine your ability to pay them.

It’s hard to argue that you can’t pay a collection agency $500 when you have a credit card on your credit report with $10,000 of available credit.

For Account Management Purposes

Your existing creditors can pull your credit reports from time to time to determine if they want to continue doing business with you and under what terms.

For Prospecting Purposes

The credit reporting agencies can sell mailing lists to credit card issuers and other companies that will give you a “firm offer of credit or insurance.”

These lists are pre-qualified based on your credit report data.

The lender isn’t actually taking possession of your credit reports but they do know, generally speaking, what is and what isn’t on them.

For Licensing Purposes

Some states are required by law to consider your financial responsibility before issuing you a license or some other government benefit. This is not referring to a driver’s license.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.