Who Can Legally Pull Your Credit Report?

Your credit report shows every loan and card you've had, your payment history, your past addresses, and often your employers. The Fair Credit Reporting Act treats that as sensitive information and limits who may see it. Anyone who pulls your report needs a legally recognized reason, which the statute calls a permissible purpose. Pulling it without one is a violation even if nothing else bad happens.

The permissible purposes

15 U.S.C. § 1681b lists the circumstances in which a report may be furnished and obtained. The main ones are:

• a credit transaction you initiated, or reviewing or collecting an account you have
• employment purposes, with your written authorization
• underwriting insurance involving you
• determining eligibility for a government license or benefit
• a legitimate business need in connection with a business transaction you initiated, or to review an account to confirm you still meet its terms
• a court order or federal grand jury subpoena
• your written instructions

Curiosity isn't on the list. Neither is an ex-partner checking up on you, a landlord you never applied to, or a company you've never done business with.

Seeing who has looked

Your report includes an inquiries section showing who has accessed your file, generally over the last two years. Hard inquiries come from credit applications and can lower your score. Soft inquiries, such as account reviews by existing creditors, don't affect your score but still appear on the copy you receive. An inquiry from a company you don't recognize and never applied to is worth following up on.

Employers have extra rules

Employers can use consumer reports for hiring and other personnel decisions, but § 1681b(b) imposes strict procedural requirements that are frequently broken.

Before getting a report, the employer has to give you a clear and conspicuous written disclosure, in a document consisting solely of that disclosure, that a report may be obtained. Folding it into a job application or a broader release doesn't satisfy the statute. You also have to authorize the report in writing.

Before taking adverse action based on the report, such as declining to hire or promote you, the employer must give you a copy of the report and a summary of your rights, and give you a reasonable chance to respond. That's your opportunity to dispute an error before a decision becomes final. After the adverse action, the employer must notify you, identify the agency that supplied the report, and tell you about your right to dispute it and get a free copy.

California goes further. Under Cal. Labor Code § 1024.5, most employers in the state can't use a credit report for employment purposes at all unless the position falls into a listed exception, such as certain managerial jobs, positions with access to specified financial or confidential information, and law enforcement.

Landlords

Landlords can obtain tenant screening reports for a rental application you submitted. In California, a landlord who charges a screening fee has to give you a copy of the report on request. See Cal. Civ. Code § 1950.6. If a landlord turns you down based on a report, the FCRA's adverse action notice requirements in § 1681m apply.

What the FCRA provides

The damages depend on who obtained the report and how. A company that willfully violates the permissible purpose requirement is liable under § 1681n(a)(1)(A) for actual damages or statutory damages of $100 to $1,000, plus punitive damages and attorney's fees. For an individual who obtains a report under false pretenses or knowingly without a permissible purpose, § 1681n(a)(1)(B) sets the floor higher: actual damages or $1,000, whichever is greater. Negligent violations are covered by § 1681o, which provides actual damages and fees.

Employers that skip the disclosure and notice steps face the same willful and negligent damages provisions. Because the disclosure rules are so specific, defective forms often affect every applicant who signed them, and these claims are frequently brought as class actions.

If an employer ran your credit, hang on to the forms you signed. Whether the disclosure was a standalone document or buried in something longer can decide the case.