Can Your Credit Be Pulled Without Your Permission?
There is a common misconception that anybody who wants to check your credit for any reason has to get your written permission. Maybe this comes from the fact that most people do ask for your permission when they pull credit, whether they have to or not, but there are actually occasions when people can pull your credit even without written permission from you.
Having a Permissible Purpose
Creditors who have what is known as a “permissible purpose” can generally pull your credit without your written consent—although in all likelihood, if there is a permissible purpose you would know if your credit is being pulled anyway.
Permissible purposes are reasons that it would make sense to pull your credit, and often are where credit is pulled because of transactions that you initiated. For example, credit is commonly pulled when you apply for a credit card or a car loan. You likely won’t be shocked to find your credit was pulled in those scenarios.
Other scenarios, such as applying for insurance, and for utilities, will allow credit to be pulled without written consent.
A creditor is allowed to pull your credit without permission when reviewing or considering collection action on an account.
Where Businesses Violate the Law
Where businesses run into trouble is where they pull credit prematurely. For example, let’s say that you walk into a car dealership. You discuss a car, maybe even test drive it, but at no point do you seriously discuss pricing, financing or even buying it. The dealer could not pull your credit without your permission because you never actually applied for credit.
Landlords run into this problem very often. Just because you look at or discuss renting does not authorize them to pull your credit, yet they often do. When you start discussing a lease or actually fill out an application to rent is when the right to pull credit begins. Landlords also cannot pull credit just to collect past due rent.
Creditors often illegally pull your credit for collection purposes, on accounts that have already been discharged in bankruptcy. If you were just an “authorized user” on the account, there is no right to pull your credit. Creditors often will pull credit in any lawsuit that involves money (say, breach of a contract, or damages to their property), but creditors cannot pull your credit just to see if you are “collectable” in a lawsuit.
Employers can only pull your credit with permission. Of course, if you refuse them that permission, they may not hire you but the law does not have a remedy for that at this time, meaning you’re almost forced to consent.
The Effect on Your Credit Score
The good news about all of this is that one or two credit pulls won’t affect your credit score significantly. Still, if you don’t recognize an inquiry it can be an indication of other problems (such as identity theft), so always follow up to make sure that a credit pull was authorized. If it was not and it should have been, you have a right to sue under the Fair Credit Reporting Act for damages.
If you see something on your credit report that doesn’t belong there, contact Jacobs Legal in Miami today to discuss if you’re entitled to recover for something improperly put on your credit.