Can Companies Check Your Credit Report Without Your Permission?

If you think that your credit report can only be pulled with your permission, think again. Under many circumstances, your credit report can be pulled without you being asked beforehand or notified after. And to make it worse, such an inquiry just may drop your credit score.

The only time your permission is required in writing is when your employer, or potential employer, seeks to check your credit report. The following, however, are some instances where your credit report can be pulled without your permission.

• Application for insurance. If you apply for insurance, your credit report just might be pulled. More and more insurance companies are using a credit score to help them determine if an application is responsible and, ultimately, to assess their level of risk.
• Credit, business or collections inquiries. You don’t have to be applying for credit to have your credit report checked during a transaction. There are a variety of credit or business transactions that might result in your file getting checked. For example, if you use your ATM/debit card to rent a car, they’re likely to run a credit check in order to complete and approve the transaction. Additionally, as part of collection practices, the agency will often pull your credit report in order to obtain up-to-date information.
• License or benefit eligibility. Certain licenses or benefits that are issued by a state or federal government agency might require a credit check to determine eligibility.
• Account status. Credit cards or other credit accounts may have certain terms that the consumer is required to meet to receive a particular interest rate or perhaps qualify for the account itself. Therefore, the company may periodically pull your report to validate that you continue to meet such terms.
• Pre-screening efforts. Your credit may be pulled to qualify you for credit card offers.

In many of these instances, there will be some fine print or other type of notification alerting you that they will be pulling your credit file. However, to the surprise of many, neither your permission nor notification is actually required. Perhaps just as important is understanding that not all inquiries affect your credit file. A “soft” inquiry, which occurs with those unsolicited pre-screen offers or when you pull your own credit report, has no effect on your credit score. A “hard” inquiry does, however, so you should review your credit report for inaccuracies even as they relate to inquiries. The good news is that, like other inaccurate items on your credit report, you can dispute an inquiry and often succeed in having it removed.

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