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Legal Use of Your Credit Report

Your credit report is a very personal history of the places you’ve lived, the places you’ve worked, and your financial transactions. Nevertheless, your credit report is routinely used by a variety of businesses – sometimes with your consent and sometimes without your permission.

Employers and potential employers: Whether you’re applying for a job or for a promotion within your company, your employer or potential employer may want to see your credit report. This is because there’s a widely held belief that those with poor credit scores are more likely to commit fraudulent acts against their employers. While research doesn’t seem to support this, many companies routinely check credit reports for potential employees who might be responsible for sensitive information or company finances. The Fair Credit Reporting Act says that employers can’t access your credit report without your permission, so you may be asked to sign a consent form. While giving permission is up to you, the reality is that refusing to sign is often a deal breaker for employers. Some states (including California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington) limit how employers can use credit reports and credit history.

Medical information: Your health records and medical information are protected under several federal laws, including the Fair Credit Reporting Act (FCRA), the Health Insurance Portability and Accountability Act (HIPAA), and the Affordable Care Act. However, employers, creditors, and insurers can get medical information about you if you sign a consent form allowing them to do so. Similar to credit report consent for employers, refusing to sign is often a deal breaker. In other words, consumers are often put in a position of having very little real choice in the matter.

Investigative consumer reports: Businesses – most often potential employers and insurers – can request an investigative consumer report. This is similar to a background check, where neighbors, family members, and acquaintances may be asked about your character, your lifestyle, and so forth. Under the Fair Credit Reporting Act, you must be notified if a company orders an investigative consumer report. If the report results in your application being denied, you have a right to the information (but not the source of the information) from the consumer reporting agency.

Others who can access your credit report: The Fair Credit Reporting Act says that virtually any business that extends credit can access your credit report. In addition, landlords, insurers, and employers can obtain copies of your credit report. Keep in mind that the FCRA also says that, if you’re denied because of something contained in your credit report, you have a right to know why, and you have the right to a free copy of your credit report within 60 days.

We hope that you find this information useful, and urge you to contact us at 203-529-5100 if you believe your credit report was used unlawfully.