When does a credtior have a right to pull reports?

[sisflomi]

When does a creditor have the right to pull your credit report? If you have an account with a creditor, does that give them the right to pull your credit report whenever they choose, until your dying day?

The FCRA says that, in general, a company can pull your credit report when you apply for credit, insurance, or employment with them; for certain governmental uses such as child-support and national security investigations; account reviews by existing creditors; and for certain professional licensing requirements. There is more to the statute, of course, and it is available for reading on the FTC site. The basic premise, overall, though, is that for a company to pull your credit report, one of two things must be in place: you must have either applied for something with the company, or you must have an existing account with them. It must be noted, however, that not everyone is required to obtain your signature or even notify you that your credit is being pulled. Most of these requirements are spelled out in state laws.

What are the limitations in place regarding these inquiries?

Once you have closed an account with a credit card company, for example, do they still have the right to pull your credit report? What if it is a "soft" inquiry, that only you can see? Have they violated any of the permissible purpose statutes?

The short answer is "YES". The FTC has clarified through opinion letters that once an account is closed, the creditor no longer has the right to perform an account review of your report, since there is no longer an account to review.

Another little-known fact is that closed-end transactions, such as mortgages and car loans, where the terms of the account are not likely to be changed based upon an account review, are not permissible. The FTC opined in the Gowan letter that...

"Like creditors, banks and others may need to consult a consumer's report in order to determine whether the consumer's current account terms should be modified. For example, the institution may provide more favorable pricing terms after consulting the report. The permissible purpose created by this provision, however, is limited to an account review for the purpose of deciding whether to retain or modify current account terms. (emphasis added).

The terms of a closed-end credit transaction are predetermined and generally may not be changed unilaterally by the creditor unless the contract expressly provides for such action (e.g., in the event of default). Therefore, the creditor is unlikely to have a reason to consider "whether to retain or modify current account terms" and, thus, would not have any routine need to procure consumer reports to "review" its accounts."

So what can you do about a company who pulls your credit report without your authorization, or for a purpose that is outside the scope of permissible purpose? There was a time when you could dispute these offensive inquiries off of your credit report, but that time is no longer. These days you have to deal with the creditor themselves. You can begin the march towards a lawsuit, beginning with a Permissible Purpose letter, which demands proof of your authorization, and absent that, the $1000 in statutory damages you would be entitled to if you sued.

Another approach that I have recently seen discussed is to simply call the creditor, and attempt to find the right person in the right department (this is usually not the general customer service department.) Once you find the right person, you can tell them your story about how you didn't apply for credit with their company, the inquiry is hurting your score (if it is a "hard" inquiry that others will be able to see), and generally be nice about it - the chances are good that they will delete the inquiry for you. This is a good approach to take if you haven't quite gotten into that "litigious mindset" just yet.

This is just a general overview of permissible purpose. Of course, any specific questions that you might have regarding permissible purpose can be posed in the forums. There is a wealth of knowledge to be found there.

[sisflomi]

bump

[ADSOFT]

There is a permissible purpose clause in the FCRA.

What I could never track down was what are a CA's right to pull your credit when the bill is TIME BARRED?????

.... how can they have permissible purpose then????

[JeanW]

Is there another thread regarding this? I'm very confused as to what this is all about and I have a TON of inquiries on my credit report.

I understand from reading here that a soft inquiry is one only you can see, so obviously a hard one is one anyone can see. How does one determine which are hard and which are soft?

[Swede]

Is there another thread regarding this? I'm very confused as to what this is all about and I have a TON of inquiries on my credit report.

I understand from reading here that a soft inquiry is one only you can see, so obviously a hard one is one anyone can see. How does one determine which are hard and which are soft?

Soft ones are the one you pull yourself and your current creditors that do periodic account reviews (to determine if they want to give you more credit) When you look at your reports, EQ will code them for you, you need to look underneath to see which one are soft and not. TU and EX will have seperate sections spelling out which one are hard and not. You need to really look closely on your reports.

[sisflomi]

When does a creditor have the right to pull your credit report? If you have an account with a creditor, does that give them the right to pull your credit report whenever they choose, until your dying day?

The FCRA says that, in general, a company can pull your credit report when you apply for credit, insurance, or employment with them; for certain governmental uses such as child-support and national security investigations; account reviews by existing creditors; and for certain professional licensing requirements. There is more to the statute, of course, and it is available for reading on the FTC site. The basic premise, overall, though, is that for a company to pull your credit report, one of two things must be in place:

you must have either applied for something with the company, or you must have an existing account with them.

It must be noted, however, that not everyone is required to obtain your signature or even notify you that your credit is being pulled. Most of these requirements are spelled out in state laws.

What are the limitations in place regarding these inquiries?

Once you have closed an account with a credit card company, for example, do they still have the right to pull your credit report? What if it is a "soft" inquiry, that only you can see? Have they violated any of the permissible purpose statutes?

The short answer is "YES". The FTC has clarified through opinion letters that once an account is closed, the creditor no longer has the right to perform an account review of your report, since there is no longer an account to review.

Another little-known fact is that closed-end transactions, such as mortgages and car loans, where the terms of the account are not likely to be changed based upon an account review, are not permissible. The FTC opined in the Gowan letter that...

"Like creditors, banks and others may need to consult a consumer's report in order to determine whether the consumer's current account terms should be modified. For example, the institution may provide more favorable pricing terms after consulting the report. The permissible purpose created by this provision, however, is limited to an account review for the purpose of deciding whether to retain or modify current account terms. (emphasis added).

The terms of a closed-end credit transaction are predetermined and generally may not be changed unilaterally by the creditor unless the contract expressly provides for such action (e.g., in the event of default). Therefore, the creditor is unlikely to have a reason to consider "whether to retain or modify current account terms" and, thus, would not have any routine need to procure consumer reports to "review" its accounts."

So what can you do about a company who pulls your credit report without your authorization, or for a purpose that is outside the scope of permissible purpose? There was a time when you could dispute these offensive inquiries off of your credit report, but that time is no longer. These days you have to deal with the creditor themselves. You can begin the march towards a lawsuit, beginning with a Permissible Purpose letter, which demands proof of your authorization, and absent that, the $1000 in statutory damages you would be entitled to if you sued.

Another approach that I have recently seen discussed is to simply call the creditor, and attempt to find the right person in the right department (this is usually not the general customer service department.) Once you find the right person, you can tell them your story about how you didn't apply for credit with their company, the inquiry is hurting your score (if it is a "hard" inquiry that others will be able to see), and generally be nice about it - the chances are good that they will delete the inquiry for you. This is a good approach to take if you haven't quite gotten into that "litigious mindset" just yet.

This is just a general overview of permissible purpose. Of course, any specific questions that you might have regarding permissible purpose can be posed in the forums. There is a wealth of knowledge to be found there.

This is mainly dealing with when you already have an account with a creditor. Many people have asked can this oc pull my credit after I paid the card off, or does this creditor have a right to pull after a bk.

This is from the FTC and states when it is okay for a creditor to pull and when its not.

[nativechild48]

From what I have read and a couple of opinion letters CA's that buy old debts should not be given the right to pull a "hard Inquiry". I have noticed that once some of my accts have been paid off and I closed, creditors have pulled my reports, and I wondered why I no longer do business with them but gave them the benefit of the doubt until recently. CA'S like camco will pull your acct. to see your ability to pay on a sol debt long before they send you a letter, and to me this is under pretext because in some states it is against the law to try to collect on a time-barred debt. Some states say well they can try to collect and they are not considered true debt collectors, but they use all of the tricks of the trade and should be goverened accordingly. THERE OUGHT TO BE A LAW AGAINST THIS A friend of mine applied for an acct. with usa bank and they pulled three hard inquiries on her in 24 hours, and she can't get two of them removed from her experian report, why three

[legend]

What I could never track down was what are a CA's right to pull your credit when the bill is TIME BARRED?????

As ADSOFT stated, Im in the same boat and curious? Arrow pulled 3 times and has still not opened a collection or anything else on my CR? I'm looking for Permisable Purpose on CA's rather than OC's? Anybody?

[legend]

What I could never track down was what are a CA's right to pull your credit when the bill is TIME BARRED?????

As ADSOFT stated, Im in the same boat and curious? Arrow pulled 3 times and has still not opened a collection or anything else on my CR? I'm looking for Permisable Purpose on CA's rather than OC's? Anybody?

[J_Snow]

What I could never track down was what are a CA's right to pull your credit when the bill is TIME BARRED?????

As ADSOFT stated, Im in the same boat and curious? Arrow pulled 3 times and has still not opened a collection or anything else on my CR? I'm looking for Permisable Purpose on CA's rather than OC's? Anybody?

Thats what they did to me on a debt from 1988. I sent them that letter in the other thread and think Methuss pointed out that there is no PP on a time-barred or beyond SOL debt.