Your credit report is private information. This is why the FCRA has basic rules in place that protect your credit information and limit who can gain access to it. However, the FCRA does allow several entities and people access to your credit information – if you have a potential or established relationship with them & you have given consent.
Entities and people who can pull your credit report include:
- Potential or current employers
- Utility companies
- Insurance companies
However, these entities need a “permissible purpose” to pull your credit. If they do not, this is a violation of the FCRA.
When Is Pulling a Credit Report Allowed?
The FCRA has several “permissible purposes” for pulling a credit report. These are situations in which pulling a credit report is considered legal.
Situations that are considered permissible to pull your credit are:
- When you apply for credit
- When a creditor is reviewing or taking action on collection(s) on your account
- When you apply for insurance
- When a creditor or insurer intends to offer you credit or insurance (limited use)
- Employment related purposes (when your employer has your consent to do so)
- When applying for certain government benefits that require a review of your financial background
- When you initiate a business transaction and there is a “legitimate business need” for your credit information
In all cases, they must get consent from you first.
When Is Pulling a Credit Report Not Allowed?
If the person or entity requesting your credit report does not have a permissible purpose, they can’t pull it freely. Even if you already have a relationship, they must alert you and get your consent. Sometimes, however, people can overreach and run your credit report without a permissible purpose.
Here are some situations where someone may run your credit for impermissible purposes:
- An employer pulls your credit report without getting consent from you.
- A person looking to sue you for a non-credit account or an involuntary debt, such as car towing fees, runs your credit to see what assets you have.
- Your creditor runs your credit after you have discharged that debt in bankruptcy.
- Someone requests your credit report to use it against you in a non-credit related lawsuit or proceeding.
- A landlord pulls your credit report while trying to collect past due rent (unless this landlord already obtained a judgment against you).
- A credit card company runs your credit when you are an authorized user, not an obligor.
If you have found your credit has been run for an impermissible purpose, that would be a violation of the FCRA which you can take action against.
What to Do If Someone Pulled Your Credit for an Impermissible Purpose
If your credit has been pulled for an impermissible purpose, you can take action. You may be able to sue them in federal or state court for damages. Your state or territory may also have additional relief.
If you can show that the CRA or other entity requesting your credit information wilfully violated its obligations under the FCRA, you can sue for damages. You can also sue for negligent violation, which is when the entity who pulled your report failed to comply with its obligations under the FCRA.
When and Where to File a Lawsuit for FCRA Violation
You can file a complaint either in state court or federal court. Your claim is subject to a statute of limitations (a time limit). Your complaint must be filed:
- Within two years from the date you discovered the violation
- Within five years from the date the violation occurred
A consumer protection lawyer can best help you get the compensation you deserve. You can book a consultation with them to learn the best next steps. They can determine which court you should sue in and for what damages.