Under what circumstances is this permissible? What is the purpose of this anyways?


According to the Fair Credit Reporting Act:

any consumer reporting agency may furnish a consumer report [...] to a person which it has reason to believe [...] intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer

See p12 (section 604). The usual interpretation of this that I've heard is that a debt collection agency that owns or has been assigned a debt can make hard pulls on your credit report without your consent. This link seems to support that (and references the same part of the act, among others):

According to the Fair Credit Reporting Act, [...], any business can access your credit history without your permission provided the business has a valid "permissible purpose." The FCRA notes that one such permissible purpose is to review your credit information in connection with the collection of a debt. Thus, if you owe money to a debt collector, the debt collector has the legal right to pull and review your credit report.

If they haven't been assigned the debt or own it outright, I believe you have a legal right to dispute it. Consult a lawyer if this is actually a situation you face.

Once use for this is if the debt collection agency has trouble locating you; since your credit report normally contains current and past addresses, this is one way to locate you.

  • Let's assume the debt is valid, but it is reasonably believed that they should have correct contact information on file. What other reasons could they attempt a pull for? Or are they allowed to do blanket pulls on all debtors for whatever reason they wish, if the debts are believed to be valid? – Bigbio2002 Jun 5 '13 at 19:24
  • @Bigbio2002 If you owe them a valid debt (by right of the debt being assigned to them), I believe they can make pulls at their discretion, as many times as they wish. While usually these are soft pulls, I don't think there is a limit to the number of hard pulls they can conduct either. I don't know too much about this area, however, so a lawyer could give you better advice. – John Bensin Jun 5 '13 at 19:31
  • Fair enough, I'll take your 10 points back, muahahaha! Seriously though, I thought your answer was pretty straightforward and hit it on the head. – Bigbio2002 Jun 5 '13 at 19:38

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