FCRA restricts who can get your credit report

Dear NNH,

Federal law recognizes that business have a right to check your credit references, in the form of a credit report, before they agree to do business with you. However, the federal Fair Credit Reporting Act (FCRA) strictly limits who can access your credit report and under what circumstances. In addition to providing a report directly to you, the FCRA lists these specific reasons for others to get a copy of your credit report:

• in accordance with your written instructions;
• in response to a court order or federal grand jury subpoena;
• to manage the risk of current or potential credit or insurance accounts that were initiated by you;
• for employment purposes, with your written permission;
• for the purposes of a potential investor assessing the risk of a current obligation;
• in connection with your application for a license or other benefit granted by the government, when consideration of financial responsibility is required by law;
• in connection with a business transaction initiated by you;
• in connection with a child support determination, under certain circumstances;
• in connection with a credit or insurance transaction not initiated by you, when a “firm offer” of credit or insurance is extended, and certain other restrictions are met.

Your permission is not required in every instance. For example, your credit history may be accessed without your approval in order to make a preapproved credit offer. In fact, the only instance in which explicit, written permission is required is for employment purposes.

However, a notice that your credit history will be accessed usually is provided with credit applications, often indicating that by signing the application you are giving the lender permission to access your credit history.

You can greatly reduce access to your credit history by businesses that send preapproved credit offers by calling 1 888 567 8688 (1 888 5 OPTOUT). Doing so will remove your name from preapproved offer mailing lists compiled by the national credit reporting companies.

Give careful thought to opting out, though. When you opt out of receiving preapproved credit offers you essentially are removing yourself from the credit marketplace. That significantly reduces your access to credit services you may want or need in the future, including lower interest rates or incentive offers you might like to have but don’t need now.

You cannot prevent access to your credit history in most other instances, including for account monitoring by your existing creditors, which are specifically allowed by federal law.

Thanks for asking.