Who can legally access my credit reports?

credit-applicationRelax, not everyone can review your credit report.  Only those with a legitimate business need can request it for reasons such as:  for credit, a service, loan application, or employment.  The requirements are set by the Fair Credit Reporting Act (FCRA), which is a federal law that protects the accuracy, fairness and privacy of consumer information housed at consumer reporting agencies. The United States’ consumer reporting agencies that compile the information in your credit report are Equifax, Experian and TransUnion.

Business needs

What are some of the business needs? They include court order, credit transaction, government license, business transaction initiated by the consumer, account review, employment, insurance, and collection of an account.

Companies with legitimate need

Which companies have a legitimate business need? Lenders/credit grantors, present creditors, credit card issuers, employers, landlords, utilities, insurance companies, collection agencies, government, court order, and you have a legitimate need regarding your own credit.

Lenders or credit grantors can include any company from which you are borrowing money.  They use the information to determine whether you qualify for a loan.  Credit card and loan applications usually include a statement informing you that they will obtain a copy of your credit report.  You are initiating the business transaction when you submit your application.

Present creditors can review or monitor your credit to make sure you still meet the needs of the account.

Credit card issuers send unsolicited pre-approved offers of credit. This is usually an offer for a credit card for which you have already been pre-qualified.  You have not applied for it, but you have been selected based upon you good credit. This is permitted by the Fair Credit Report Act.

Employers must have your written permission to review your credit report.  This includes both potential and current employers.  Some states have restrictions on obtaining a credit report as part of the background check for employment purposes, which is determined by the position and responsibilities.

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Landlords obtain credit reports to determine your ability to pay rent.  This is a business transaction initiated by the consumer.

Utilities are included in this category because this is a service. This is a business transaction being initiated by you. You often pay a deposit and or receive the service prior to payment.

Insurance companies evaluate your credit as a part of underwriting process to determine whether to issue you a policy or renew it.

Collection agencies can review your report for purposes of collecting the account.

The government can review your report for employment purposes and to issue a license.

A court order can request that the credit bureaus provide a copy of your credit report.

Consumers can request a copy of their own credit report.  You are entitled to a free copy of your credit report annually for all three credit bureaus at www.annualcreditreport.com.  You can monitor your own account also.

As you can see, many companies have permission to obtain your credit report, but the key is that they must have a legitimate business purpose.  Not just anyone can obtain a copy of your credit report.  You have to apply to become a customer with the credit bureaus and prove that you have “permissible purpose”.  Not just anyone can have access such as your former spouse, neighbor, former boyfriend or girlfriend, friend, enemy, relative, etc.

JRU on 60 Mins SetCredit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, founder of www.creditexpertwitness.com and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.