Inquiries and Requests for Credit Reports
Permissible Purpose as Defined by the Fair Credit Reporting Act
Nov 7, 2009 Katrina Rief-Derrico
According to the information found in the FCRA, consumers have a right to view information contained in their credit file, dispute inaccurate information and be provided with a free annual credit report. The Federal Trade Commission has published a full text version of the Fair Credit Reporting Act or FCRA for consumers who would like a copy of the entire 86 page statute.
Free Annual Credit Report
There are currently three main credit reporting agencies Equifax, Trans Union and Experian. Companies use the information in these reports to determine a consumers’ credit worthiness for new credit or continuation of an old account. Fair Isaac provides credit score information to mortgage lenders for the determination of repayment risk by a consumer or loan applicant.
According to the Fair Credit Reporting Act, consumers are entitled to one free credit report annually and in some states bi-annually. Since each agency is run separately, it is advised that consumers request a separate report from each of the four agencies.
Consumers can request a free report by contacting each agency at the address below or online. (See resources for website addresses)
- Equifax Credit Report, PO Box 740256,Atlanta, GA 30374,(800) 685-1111
- Experian Credit Report, PO Box 2002,Allen, TX 75013,(888) 397-3742
- Trans Union Credit Report, PO Box 2000, Chester, PA 19022,(800) 916-8800
- Fair Isaac FICO Credit Score, 901 Marquette Ave.,Minneapolis, MN 55402,(612) 758-5200
Who Can Pull My Credit Report?
Credit reporting agencies such as Fair Isaac, Equifax, Trans Union or Experian may only provide a credit report in response to Court Order or by written instruction from the consumer his/herself. The Fair Credit Reporting Act limits this service to entities where the consumer is believed to have initiated a credit transaction, extension of credit, review of credit or the collection of an account.
Additionally, there are provisions in the FCRA that allow employers, insurance companies, State, Local and other Government entities for purpose of licensure to request a copy of a consumer’s credit report.
Credit Report and Child Support Enforcement
A State or local child support enforcement agency may request a consumers credit report if they meet specific conditions.
- Paternity must be established.
- The agency has to provide the consumer with notification of the intent to obtain a credit report. This notification must be sent at least 10 days prior to the request and be mailed to the consumer by certified or registered mail to the last know address.
- The purpose of the report is to establish the capacity to make child support payments or to determine appropriate level of payment.
- Certification that the report will be kept confidential and will not be used in connection with any other civil, administrative or criminal proceeding or for any other purpose.
Application for Employment and Credit Report
Employers may request an applicants’ credit report in connection with an application for employment. In order to do so the employer must certify and meet the following:
- Give the applicant a proper disclosure and the applicant gives authorization to the employer pull a credit report.
- Certify the information received will not be used in violation of any applicable Federal or State equal employment opportunity law or regulation.
- Employer and/or consumer reporting agency must provide with the report a summary of the consumer’s rights under this title.
- If adverse action, non-hire or termination by employer is based in whole or part of the consumer's credit report, the employer must provide a copy of the report and the consumer's rights under this title.
Other Authorized Reasons for Pulling a Credit Report
Buying and selling loans, insurance policies and collection accounts on the secondary market is big business. In addition to the permissible reasons for disclosure listed above, banks, loan service providers or insurance agencies may request a consumer report in relation to existing credit obligations to determine the risks associated with an existing account.
The FDIC or National Credit Union may request a consumer’s report in preparation or in connection with the resolution or liquidation of a failed or failing insured depository institution or insured credit union. Any agency or department of The United States Government may request a consumer’s credit report for national security investigations.
Consumer reports may also be requested for any other legitimate business need or any business transaction initiated by the consumer.
Consumer Rights Under the Fair Credit Reporting Act
Fair Credit Reporting Act also provides guidelines for identity theft prevention, fraud alerts, active duty alerts and blocking of information resulting from identity theft. The FCRA includes regulations for how long negative information can be reported, what type of information may be included in a consumer report and the procedures for disputing inaccurate information.
All consumers should be familiar with their consumer rights protected under the Fair Debt Collection Credit Act and the Fair Credit Reporting Act, but knowing the information provided in these two federal laws is essential for anyone repairing or re-establishing their credit.
Additional Resources:
- Equifax Credit Report - http://www.equifax.com
- Experian Credit Report - http://www.experian.com
- Transunion Credit Report - http://www.transunion.com
- Fair Isaac FICO Credit Score - http://www.myfico.com
- Fair Credit Reporting Act - http://www.ftc.gov/os/statutes/031224fcra.pdf
- Fair Debt Collections Practices Act - http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf
Fair Credit Reporting Act
|
What do you think about this article?
More in Business & Finance
Latest Articles