As a consumer, it’s easy to feel as though the corporations and other big companies are out to get you. However, you should note that there are a number of laws established to help protect your rights as a consumer. One such law is the Fair Credit Reporting Act (FCRA). This was established to help ensure that your credit is accurate and private. As such, companies require a permissible purpose to access your information. The following blog explores what you should know about these matters and why connecting with a California consumer lawyer is critical.
What Is the Role of the FCRA?
The FCRA is one of the most important laws established to help protect consumers. Essentially, the main function of this law is to ensure the accuracy of the information included in consumer credit reports. For example, a credit reporting agency cannot include information it knows to be false on the credit report of a consumer. In addition to ensuring accuracy, the FCRA also allows consumers the right to dispute the inclusion of incorrect information on their credit reports, such as errors or fraud.
An important aspect of the FCRA is that it protects the privacy of consumers. As such, companies cannot pull your credit report without your permission. Not only does this aim to protect your privacy, as random companies cannot simply request your sensitive financial information, but it also helps to protect your credit report. When hard inquiries are performed, it can lower your credit score. Too many hard inquiries can indicate to landlords and lenders that you are applying for loans too frequently.
What Does Permissible Purpose Mean?
As mentioned, to pull your credit, a company must have a valid reason to do so. This is referred to as a “permissible purpose.” There are several grounds on which this is a valid reason to pull someone’s credit report as per the FCRA. Most commonly, this is because the consumer initiates the act in which their credit report will be pulled. For example, you’ll find that if you apply for an apartment, the landlord will likely run a credit check on you. This helps determine whether or not you would be a good candidate to rent to, based on your previous payment history. The same applies to lenders, as they must determine whether or not you are a good candidate to repay your loans on time.
However, without your initiation, there are some circumstances in which companies and agencies can pull your credit report without your explicit permission. These permissible purposes include when responding to a subpoena, reviewing an existing account, for child support purposes, or if you’ve applied for a government license and the law requires your financial responsibility to be taken into consideration.
In the event your credit report is pulled without your permission, it’s in your best interest to connect with an experienced consumer defense attorney as soon as possible. Not only can the company face consequences under the FCRA, but you are also within your rights to file a civil suit against the company for violating your rights as a consumer.
