Who Can Access Your Credit Report

The Fair Credit Reporting Act (FCRA) requires credit bureaus to protect your personal information. There are only certain circumstances in which the bureaus can share your report. Here are the groups that are legally able to review your report:

Lenders

Whenever you apply for a loan, you are giving the lender permission to access your credit report. Lenders will want to see how creditworthy you are before determining the terms of your loan (such as amount and interest rate). If your report shows that you have a strong record of paying back your debts on time, lenders will be more willing to offer you low interest rates on a larger amount of money.

Credit card companies

Whenever you apply for a new credit card, the credit card company can review your credit report before extending credit. Often, those ‘pre-approved’ letters you get in the mail aren’t true offers of credit—credit card companies will want to see your report before making deciding to extend you credit and on what terms. A ‘pre-approved’ letter may offer you an 8.9% APR, but that interest rate may change during the formal card application process.

Utility and cell phone companies

A utility company may want to check your credit before turning on your water, electricity, gas, or cable. They are providing you these services on credit, and want to make sure you’ll pay them at the end of the month. Many cell phone companies will do the same, and may not let you enroll in certain monthly plans depending on your credit. If you have bad credit, utility and cell phone companies may require an upfront deposit before activating service.

Employers, landlords, and insurers

Employers may want to review your credit report before hiring you, especially if you are a financial executive. Consenting to a background check gives an employer permission to pull your credit report. Landlords have the legal right to review a potential tenant’s credit report. Insurers also use credit reports when underwriting an insurance policy.

Court agencies, child support agencies, and collection agencies

Your credit reports can be subpoenaed and viewed by the courts if relevant to a lawsuit. A child support enforcement agency has the power to pull a credit report to determine a parent’s financial capability of making child support payments. Lenders and collection agencies can pull your report for the purpose of trying to collect a debt that you’re not paying.

You

You have the ability to review your credit report at any time. The Fair and Accurate Credit Transactions Act (FACTA) of 2003 entitles each American to one free credit report annually from each of the credit reporting agencies (TransUnion, Equifax, and Experian). If you want additional access to your credit report, you can purchase it from the credit bureaus or other affiliated companies.

Credit inquiries: hard vs. soft

When a company pulls your credit report, they are making an “inquiry” into your credit. These inquiries or credit checks are recorded in a list on your report. Only the lenders and creditors with which you have applied for new loans and credit cards should appear on this list. There are two types of inquiries: soft and hard.

Soft inquiries happen when you check your own report, when you are pre-screened for a solicitation, or when an employer, insurer, or landlord pulls your credit file. Soft inquiries also happen when a current creditor pulls your report for a routine account review. Soft inquiries have no affect on your credit score, and do not appear on your report.

Hard inquiries occur whenever a lender or creditor checks your credit in response to an application for a new loan or credit card. Frequent hard inquiries can negatively impact your credit score, so don’t apply for new credit too often in a short period of time.

Adverse action notices

If negative information in your credit report causes a lender, credit card company, employer, landlord, or insurer to change their decision to offer you a loan or other benefit, then they must give you what’s called an adverse action notice. An adverse action notice informs you that you have been denied credit, employment, insurance, or other benefits based on information in a credit report. It can be oral, written, or in electronic form. The notice should indicate which credit reporting agency was used, and how to contact them. Under the Fair and Accurate Credit Transactions Act (FACTA), you are entitled to a free credit report after you receive an adverse action notice.