Who Can Check Your Credit Report?
IdentityIQ
The primary purpose of your credit report is to demonstrate your creditworthiness to lenders and creditors. In other words, your credit report can help companies decide whether to approve or deny your loan and credit card applications.
But lenders and credit card companies aren’t the only ones that can pull your credit report. In fact, your credit report is available to many third parties, some of whom can pull your credit without your knowledge. But first, they must have a “permissible purpose.”
Key Takeaways
- Only those with a valid legal reason under the Fair Credit Reporting Act (FCRA) can pull your credit report.
- Common parties that check your credit include lenders, landlords, employers, and government agencies.
- Soft inquiries don’t affect your credit score, while hard inquiries might temporarily negatively affect your score.
- In many cases, such as when employers or landlords want to access your credit report, they need your written permission.
- Your credit report cannot be accessed by friends, family members, or acquaintances without your consent.
Permissible Purpose
Under the Fair Credit Reporting Act (FCRA), only users with a legally permissible purpose may pull a copy of your credit report. There are many permissible purposes, including:
- When you apply for credit, or when an existing creditor is reviewing or initiating collections.
- When a court or federal subpoena orders it.
- When the consumer has instructed the party in writing to access their credit report.
- When a potential employer requires a credit check as part of the hiring process.
- When you apply for insurance.
- When there is a legitimate business need as part of a business transaction.
There are several other permissible purposes, but the main takeaway is that there must be a legitimate government or business need to pull your credit report. Common examples are that you have applied for a credit card or loan, you have applied for insurance, an employer is checking your credit as part of the hiring process, or you are the subject of a criminal or civil investigation.
If the third party does not have a permissible purpose, your credit report is legally untouchable. That means your ex-husband, neighbor, friends, and relatives can’t pull your credit report. And in many cases, even if the party does have a permissible purpose, you still need to provide written consent.
Who Can Check Your Credit Report?
The list of companies and third parties that can pull your credit report may be longer than you think:
Creditors and Lenders
When you apply for credit – such as a credit card, auto loan, or mortgage – creditors or lenders pull your credit report to determine whether you qualify and assess your creditworthiness.
In addition to looking at your payment history, they examine your current debt levels and overall financial behavior. This helps them decide whether they should approve your application and, if so, what interest rates and credit limits to offer.
Existing creditors may also review your credit periodically to check for any changes that might affect your ability to repay. For example, if you fall behind on payments, creditors may use your credit report to evaluate how to handle collections or adjustments to your account.
Landlords
Landlords often check potential tenants’ credit reports when reviewing rental applications. They pull credit reports to assess your financial responsibility and ensure you can afford rent.
Red flags, such as previous evictions or late payments, can impact their decision to rent to you. In some cases, a poor credit history could result in higher security deposits or the denial of your rental application altogether.
However, landlords need your consent to pull your credit report, so you’ll likely be asked to sign an authorization form when you submit a rental application.
Employers
In certain states, employers may run a credit check as part of the hiring process. They often use credit reports to gauge your level of responsibility, especially for positions that involve financial management.
However, employers are not allowed to pull your credit report without your written consent. In states where allowed, i an employer is considering using your credit history as part of their decision, they must notify you and obtain your permission before accessing your credit report.
It’s worth noting that employers can receive a version of your credit report that excludes your credit score. They focus instead on your payment history, outstanding debt, and other financial behaviors.
Collection agencies
If you have unpaid debts that have been sent to collections, collection agencies may periodically pull your credit report to track your financial situation.
They use this information to determine the likelihood of recovering the debt or pursuing legal action. While this may seem invasive, collection agencies are legally permitted to access your credit report if you owe money, provided it’s related to their collection efforts.
Utility companies
When you sign up for services like electricity, gas, or water, utility companies may check your credit report before establishing an account. This helps them gauge your likelihood of paying bills on time.
If your credit report shows a pattern of late or missed payments, utility companies may ask for a security deposit or limit your payment options. Like other businesses, utility companies need your consent before pulling your credit report.
Government agencies
Certain government agencies may pull your credit report in specific circumstances, such as when you apply for government assistance programs or if you’re under investigation for criminal or civil matters.
For example, the Internal Revenue Service (IRS) might access your credit report during an audit to verify your financial information. These checks are typically allowed without your explicit permission but are limited to circumstances outlined by law.
Identity theft and credit monitoring and credit management services
When you sign up for identity theft protection or credit monitoring services, they regularly access your credit reports to monitor for changes or possible suspicious activity. This monitoring does not negatively impact your credit scores.
Some credit management services may ask for limited power of attorney to pull your credit report and work with creditors to resolve disputes. If you enroll in such services, you’ll need to provide written consent for these activities.
Who Cannot Access Your Credit Report?
Credit reporting agencies generally only provide your report to those with a valid reason under the FCRA. While many businesses and organizations can access your credit report, others are restricted from doing so without your permission.
Here’s a look at who cannot access your credit report:
General Public
Your credit report is private. Friends, family members, neighbors, or acquaintances cannot access your credit report without your explicit consent. Even if someone has a personal interest in knowing your credit history, they cannot access it unless they have a legitimate and legal reason under the FCRA.
Employers, Landlords, or Businesses Without a Legitimate Interest
Employers, landlords, and businesses that do not have a legitimate interest in your creditworthiness cannot check your credit report. Only businesses involved in extending credit, insurance, or similar services are allowed to pull your credit report.
Individuals Without a Court Order
Even if someone has a personal dispute with you, they cannot access your credit report without a valid court order. This protects your privacy and ensures that only those with legal authority can access your credit information.
How You Can Check Your Credit Report
Checking your credit report is essential to stay on top of your credit health. IdentityIQ offers access to your credit reports and credit scores, with 24/7 monitoring and real-time alerts for possible suspicious activity that may negatively affect your credit score.
Soft Inquiries and Hard Inquiries
Not all credit inquiries are the same—there are hard inquiries and soft inquiries.
Hard inquiries occur when a potential lender pulls your credit report to make a decision on an application. This will occur when you apply for a credit card or loan. Hard inquiries can show up on your credit report and lower your credit score temporarily, though the long-term damage is minimal. It’s a good idea to not initiate too many hard inquiries in a short period of time. Hard inquiries generally only take place with your permission.
Soft inquiries usually occur when your credit report is pulled as part of a background check. This will occur when you are preapproved for a loan or a potential employer is checking your credit where allowed. These inquiries may or may not occur with your permission, but they don’t affect your credit score.
To help keep you on top of your credit scores and reports, consider signing up for identity theft and credit protection. A service like this can keep on top of your scores while providing 24/7 monitoring protection.
Credit Report FAQs
Here are answers to common questions regarding who has access to your credit report.
Can someone else check my credit report?
Yes, but only if they have a permissible purpose under the Fair Credit Reporting Act (FCRA) and, in many cases, with your explicit consent. Examples include lenders, landlords, and employers (with permission).
Who can access your credit report?
Those with a valid reason under the FCRA, such as creditors, lenders, landlords, employers (with your consent and where permitted), collection agencies, utility companies, and certain government agencies, can access your credit report.
Can anybody check your credit score?
No, not just anyone can check your credit score. Only parties with a legitimate reason, such as lenders or credit monitoring services, are allowed to access your credit score.
Who can I trust to check my credit score?
You can trust legitimate financial institutions, credit monitoring services such as IdentityIQ, and the three major credit bureaus to securely check and provide your credit score.
Bottom Line
Your credit report is a crucial part of your financial life, influencing everything from loan approvals to job applications. Only those with a legal, permissible purpose, such as lenders, landlords, and certain businesses, can access your credit report. It’s important to know who can and cannot check it to safeguard your personal information. Regularly monitoring your credit report helps you stay informed and protects against unauthorized access or inaccuracies that could negatively impact your financial standing.
Take control of your credit today with comprehensive credit monitoring services from IdentityIQ. IdentityIQ offers 24/7 credit report monitoring, identity theft protection, fraud alerts, identity theft restoration, and more. Get started today and get the peace of mind you deserve.
The post Who Can Check Your Credit Report? appeared first on IdentityIQ written by Brian Acton