Using your financial and credit history without your authorization is illegal under the Fair Credit Reporting Act (FCRA).
But what are the rules for using your credit reports? Under the act, your consent to access your credit report is not required if the inquiry is for a permissible purpose (ex. for employment purposes or to extend credit, etc.).
Notice Requirements for Users of Consumer Reports
The Fair Credit Reporting Act (FCRA) requires that users of credit reports provide notifications to you, the consumer, if the user takes an "adverse action" against you. An adverse action includes:
- Revoking or denying credit for any reason
- Changing the terms of existing credit
- Granting credit, but substantially not in the amount or terms requested
- Denying or cancelling an insurance policy, or unfavorable change in a proposed policy
- Denying employment or other employment decision that adversely affects you
- Denying or cancelling any government benefit or change in terms of a current benefit
- Any unfavorable action made based on your consumer credit rating or account
The person making the denial, change or cancellation based on this information must:
- Provide notice of the adverse action to you
- Provide you with the name, address and telephone number of the consumer reporting agency providing the report
- Provide you with a statement that the consumer reporting agency did not make the decision to take action against you (i.e. the denial, cancellation, etc) and that the agency is unable to provide you with any specific reason as to why the action was taken, and
- Provide you with a notice of your right to request a free copy of your credit report from the CRA and to dispute the accuracy of the information in the report. You have 60 days to proceed with this request