Access to credit reports is defined by the Fair Credit Reporting Act (FCRA). The FCRA defines the access in terms of Permissible Purpose.
1. Consumers always have a permissible purpose to access or purchase their own credit report or score.
Whenever a consumer accesses their credit report, it has NO impact on their credit score.
As of February 15, 2009, consumers can no longer access Experian FICO scores. Read more>>
2. Consumers may give written permission to businesses and organizations with a defined Permissible Purpose.
Businesses with defined permissible purposes that may pull credit reports with consumer permission include:
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Creditors
When a consumer or business initiates a credit application, the application signed includes permission for the creditor to pull their credit file and use the information to evaluate and determine the loan offer. This is considered a Hard Inquiry.
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Employers
With written permission, employers may pull credit profiles of prospective job applicants as well as current employees. Learn more about Employers and Credit.
- Insurance companies
Insurance companies may evaluate credit files to:
1) evaluate the probability the consumer will file claims
2) decide whether or not to offer insurance
3) determine the cost of the policy
4) determine the amount of coverage for which the applicant is eligible
A number of states have passed or are considering passing laws that forbid insurers from using credit reports based on consumer action that risk-based pricing of insurance policies based on credit scores is discriminatory to certain populations. Learn more about Insurance and Credit.
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Landlords
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Government agencies
Government agencies may use credit profiles to determine eligibility for a license, where a consideration of financial status is required by law.
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Utility and telecommunication companies
Utility and telecommunication companies may ask new customers for permission to review their credit to:
1) decide whether to offer you the service
2) evaluate whether to charge you a deposit
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Housing and Credit Counseling Agencies to work with counseling clients
Certified credit counseling agencies and HUD-certified housing counseling agencies have permissible purpose to pull the credit reports of their clients. These credit reports are considered Soft Inquiries since they do not initiate a credit application.
3. Potential creditors may review credit profiles and extend credit offers not initiated by a consumer.
- Potential creditors are permitted to review credit reports without consumer consent. Consumers can see a list of what potential creditors have reviewed their credit profile. Each is listed as a Soft Inquiry on their personal credit report.
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