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The Law On Impermissible Credit Pulls

March 21, 2020

The Fair Credit Reporting Act ("FCRA") and California Consumer Credit Reporting Agencies Act ("CCRAA") provide rules that protect your credit information and implements limits on who can pull and access your credit report.  In order for an individual or company to pull your credit report they must have a permissible purpose.  The FCRA and CCRAA lists the following circumstances as a permissible purpose to pull your credit report: 1) when a court or federal grand jury orders it; 2) when you give that employer or company permission to do so; 3) when you apply for credit, or when a creditor is reviewing or taking collection action on your existing account; 4) when a potential creditor or insurer intends to extend you offers of credit or insurance; 5) when you apply for insurance; 6) employment related purposes; 7) when you apply for certain government benefits or licenses that require a review of your financial background; and 8) when you initiate a business transaction and there is a “legitimate business need” for your credit report that relates to that business transaction.


It is a violation under the FCRA and the CCRAA if an individual or company uses or obtains your consumer credit report without any of the above referenced permissible purposes.  Under the FCRA, a consumer may bring an action for actual damages sustained by the consumer or $1,000, whichever is greater, against an individual or company that knowingly obtained a credit report without a permissible purpose.  Under the CCRAA, a consumer may bring an action for a civil penalty up to $2,500 against an individual or company who knowingly and willfully obtained access to your credit report without a permissible purpose. 


It is important as a consumer to check your credit report on a consistent basis.  A free copy can be obtained from each credit bureau at www.annualcreditreport.com.    


Please review your reports.  If you believe your credit report maintains errors or your credit report has been pulled or accessed without a permissible purpose please contact our firm to discuss how we can help.
 

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