As a consumer, you may feel as though the world is run by giant companies that can act without consequence. However, it’s important to understand that there are laws established to help protect you from unfair treatment by corporations. One law you should familiarize yourself with is the Fair Credit Reporting Act (FCRA), which provides several rights to consumers regarding credit reporting, which is ultimately one of the most important aspects of being a consumer. Under the FCRA, companies must have a “permissible purpose” to access your information. If you’re unsure what constitutes a permissible purpose, you’ll want to keep reading to learn more about this important matter and learn when connecting with a California credit report lawyer is in your best interest.
What Is the FCRA?
The Fair Credit Reporting Act (FCRA) is a law established to help protect consumers by holding credit reporting companies liable for errors in consumer reports. This law helps ensure accuracy by holding reporting agencies to strict standards regarding the accuracy of the information they include in consumer reports. In addition to ensuring that the information they report is accurate, the FCRA also allows consumers the right to dispute information and seek damages from companies that include false details on their credit reports.
Another important facet of the FCRA is that it helps protect consumer privacy. As such, only certain individuals are able to access your consumer reports with your consent. This means that a company cannot simply pull your credit report for the sake of doing so. Not only does this help protect your privacy, as there is a considerable amount of sensitive information stored in these reports, but it also helps protect your credit score. Each time your credit report is pulled and a hard inquiry is performed, it can cause your credit score to fall. Additionally, having a considerable number of inquiries on your report can be a red flag to lenders, as it indicates that you are searching hard for loans.
What Is Permissible Purpose?
Under the FCRA, credit checks are allowed for valid reasons, also called “permissible purpose.” The vast majority of instances in which your credit report is pulled are because you, as the consumer, initiate these matters. For example, if you apply for an apartment, the landlord will need to run a credit check to determine if you would be a good candidate to rent to. This applies to other lenders, such as if you apply for an auto or personal loan.
However, in some select instances, you’ll find that a company does not need your explicit permission to perform a credit check, as permissible purpose expands past your consent. For example, if a company needs to access your credit report when responding to a subpoena, for child support purposes, or because you’ve applied for a specific government license, your express permission is not necessary.
If you have been taken advantage of by a company that pulled your credit report without your consent, it’s important to understand that you do not have to simply accept this. You are within your rights to pursue a claim against a company that violates your rights as a consumer. That’s why it’s in your best interest to connect with an experienced attorney with Loker Law, APC. Our team understands how overwhelming these matters can be, which is why we will do everything in our power to assist you through these complex issues. Contact us today to learn more.
