Accessing your credit information is easier now than it has been at any other point in history. Thanks to the Fair and Accurate Credit Transactions Act, an amendment to the Fair Credit Reporting Act (FCRA), you even have the right to view a free copy of all 3 of your credit reports every 12 months. To claim your free reports from Equifax, TransUnion, and Experian simply visit AnnualCreditReport.com. Depending upon your state of residence you may have access to additional free copies of your 3 credit reports each year as well.
Even after you have exhausted your free annual credit reports, there is no shortage of websites online which will grant you access to your credit reports and possibly your scores either for free or for a fee. This easy access to your credit information is certainly a good thing for consumers. However, the ease of access might also have you concerned about who else can put their hands on a copy of your credit reports.
The good news is that the credit reporting agencies (CRAs) are not simply allowed to release your credit information to anyone who asks for it. Instead, the FCRA lays out some very specific rules regarding to whom the CRAs may disclose your credit information. In order to access your credit report a company must have what is legally referred to as Permissible Purpose. Read below for a list of some of the most common reasons your credit reports may legally be accessed.
Court Order
Per the FCRA if a judge orders the CRAs to disclose your credit reports, legally they are bound to hand them over.
Request from You, the Consumer
You also have the right to access you own credit reports as often as you like. As already mentioned, you even have the right to a free copy of your 3 reports annually. Beyond that you can still request unlimited additional copies of your credit reports, though you might be charged for the privilege of doing so.
Credit Transactions
You probably already know that when you apply for a loan or credit card the bank or card issuer is going to check your credit as part of the application process. In general this is 100% legal under the FCRA.
Employment Screening
Current and prospective employers also have permissible purpose to pull your credit reports. However, your written permission is required first. There is also a common myth that employers may access your credit scores as well, but the truth is that employers may have access to your credit reports only.
Insurance Underwriting
Insurance companies often rely upon your credit information in order to determine the risk of doing business with you and, if they choose to take you on as a customer, how much to charge. According to the FCRA this is typically permitted.
Account Review
Under the FCRA your existing creditors are permitted to obtain your credit reports as well. Current creditors may pull your reports and scores to determine whether your risk level has changed and if they wish to continue doing business with you.
Child Support
Per the FCRA your credit reports can legally be used to determine how much you can afford to pay in child support.
Collection Purposes
Like it or not, collection agencies are often able to pull your credit reports according to the FCRA and, unfortunately for the consumer, they do not need your permission to do so. As long as the collection agency follows the rules, these reports may be used for skip tracing purposes (aka finding you) and for determining your capacity to pay your debts.
Prescreened Credit Card Offers
Have you ever received a "preapproved" offer in the mail? If so, the CRAs likely sold your information as part of a large mailing list to a credit card issuer. Your full credit report was not given to the card issuer, but due to a specific set of search criteria the card issuer probably has a very good idea of the information contained in your report. Although you did not specifically authorize the access or even apply for a loan, this disclosure of your credit information is still allowed under the FCRA. If you want to stop the CRAs from selling your credit information for prospecting purposes then you will have to visit OptOutPrescreen.com to officially make the request.
Unauthorized Credit Report Access
You should already be keeping an eye on your credit reports often to make sure that the information contained there remains accurate. However, you may not have realized that you should be keeping an eye on your credit report inquiries (records which pertain to when your reports were accessed) as well.
Many credit report inquiries (aka pulls) have the potential to lower your credit scores. Plus, if you discover unauthorized or suspicious inquiries it could even be a sign of identity theft. The FCRA gives you the right to dispute any such inquiries - either on your own or with the help of a reputable credit repair professional.
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Michelle Black is an author and leading credit expert with a decade and a half of experience, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars across the country. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.
