Permissible Purpose to Access Credit Reports

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Question:

Under the "permissible purposes" rule in the FCRA, if a customer applies for joint credit but only one applicant is present to sign the application authorizing us to obtain a credit report, do we have a "permissible purpose" to obtain a credit report on the absent applicant? Do we need the absent applicant's signature before obtaining the credit report? Is the same thing true for deposit accounts when checking with ChexSystems? I have not been able to find anything indicating the customer is required to sign giving permission to obtain the credit report.

Answer:

While your internal policy or state law may require a signed authorization to access a credit report, the FCRA does not. You need a valid reason to do so and this could be the oral application, as an example. This applies for both loans and operations as both are under the same FCRA rules.

Having a signed authorization does help to eliminate confusion over the authorization and provides an audit trail for verifications.

First published on BankersOnline.com 9/6/04