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 an existing relationship and you have provided the necessary consent.
Entities and people who can pull your credit report include:
- Landlords,
- Potential or current employers,
- Utility companies, and
- 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 Are Credit Reports Allowed To Be Pulled?
The FCRA has several “permissible purposes” when a credit report is pulled. These are situations in which pulling a credit report is considered legal.
Situations that are considered permissible to pull your credit are:
- Credit applications,
- When a creditor following up on collection(s) on your account,
- When you apply for insurance,
- When a creditor or insurer wants to increase your limits, or cover,
- For justified employment reasons,
- Applications for government benefits, and
- Business transactions supported by 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:
- Your credit report is pulled by an employer without the necessary consent from you.
- A person who wants to initiate a lawsuit against you for an involuntary debt or a non-credit account.
- Your creditor runs your credit after you have debt removed after declaring bankruptcy.
- Someone tries to use your credit report against you in a non-credit related lawsuit.
- A landlord might pull your report when trying to collect on overdue rent or, the landlord has obtained a judgment against you.
- A credit card company runs your credit despite you being an authorized user.
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 With 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, or
- Within five years from the date the violation occurred.
Bottom Line
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.
