What You Need to Know About the New VantageScore Credit Reporting Model

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Each of the 3 significant credit reporting companies, Experian, TransUnion and Equifax, keep well over 200 million credit files on specific customers.

One of the ways they generate income is by offering your credit report. But, Federal law strictly limits access to your credit reports.

The Fair Credit Reporting Act (“FCRA”), which is over 40 years of ages, specifies under what conditions the credit reporting agencies may reveal your credit reports.

These conditions are legally described as “Acceptable Functions.”

If a Permissible Purpose doesn’t exist it wouldn’t be legal for a credit-reporting firm to reveal your credit report.

But, as you’ll see it’s not that difficult for a genuine function to exist.

The Permissible Purposes Are:

If You Desired A Copy Of Your Own Credit Report

This is commonly referred to as a customer disclosure.

You can request a copy of your credit report as commonly as you like, for whatever reason.

You may need to spend for it, however you constantly have a right to see it.

Court Order

I do a ton of credit related skilled witness work so I see this the time.

If a court orders the credit reporting companies to reveal a credit report then that’s an allowable reason under Federal law.

To Facilitate a Credit Related Transaction

You probably did not require me to tell you this however when you make an application for credit the credit reporting firms can disclose a copy of your credit report to the lender.

And, no, your signature isn’t needed. That’s a misconception.

For Work Screening Purposes

Unlike a credit transaction, your trademark is needed if your existing or prospective employer wishes to pull your credit report.

This specific acceptable purpose is the root of the most typical credit related myth, which is that companies have access to your credit scores.

That is not really real. They’ve access to your credit reports. Huge difference.

There are some states that restrict access to credit reports to just particular sorts of job functions however at a Federal level it’s still 100 % legal for any employee.

For Insurance Underwriting Purposes

Insurance business are enabled to pull your credit reports to determine if they want to work with you and at what premiums.

There are some minor differences in the credit reports they get versus those that a lender would get, but very little.

To Determine Ability to Make Child Support Payments

I never get much of an argument for this one.

Your credit report can be used to determine the amount of you can afford to pay in child support.

To Assist With Debt Collection

I constantly get an argument for this one but the law is the law.

Collection firms are permitted to pull credit reports, without your authorization, to help them collect financial obligations.

They can make use of the credit reports to get your address and to identify your capability to pay them.

It’s difficult to argue that you can’t pay a collection agency $500 when you’ve a credit card on your credit report with $10,000 of offered credit.

For Account Management Purposes

Your existing lenders can pull your credit reports from time to time to determine if they wish to continue doing business with you and under what terms.

For Prospecting Purposes

The credit reporting agencies can sell mailing lists to charge card issuers and various other companies that’ll provide you a “company offer of credit or insurance.”

These lists are pre-qualified based on your credit report data.

The lender is not really really seizing your credit reports but they do know, generally speaking, exactly what’s and exactly what is not on them.

For Licensing Purposes

Some states are required by law to consider your monetary obligation prior to providing you a license or some various other government perk. This isn’t describing a motorist’s license.