Credit Reports and Applications


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    I’m looking for suggestions on how to “teach an old dog a new trick”.

    At issue – credit reports and applications. I’m trying to get lenders to document any occasion in which a credit report is going to be dated prior to the date that is on an application for credit. IMO, at the heart of FCRA, a permissible purpose is all that’s required to obtain a credit report and a permissible purpose can be the result of a customer saying, “I’d like to buy a car, can you tell me how much I can borrow?” It’s easy to say that a lender should complete (or start or date) the credit application on that date, but that’s not always going to happen and all sorts of things happen in between. However, I’ve requested that the lending staff document the mismatches in order to keep files neat.

    A seasoned lender remembers the good old days very fondly and reminisces to me, “I can pull a credit report on an existing customer, can’t I?”. 604(a)(3)(A) discusses review, collection, and credit extensions. The lender could argue that he wants to “review” the account, but why does he want to review the account? Because they have a credit request.

    Here’s the deal. How do you go about a tactful way of instituting change when the persons who need to change are firmly entrenched in their opinions and have been in their positions so long that they have accumulated so much goodwill (clout) that you have to tread lightly with them.

    Sorry for rambling, just a bit frustrated.


    A credit report should not be pulled before the customer applies for credit. You should be able to document the application. Following are a few pertinent comments from the FTC Commentary. If your lenders are going to pull a report before an application has been submitted, they should obtain written consent from the customer. (See the final comment below.)

    An application by a consumer for credit gives rise to a permissible purpose to obtain a consumer report, regardless of form. When a consumer applies for credit, whether in person, by phone, by mail, or by electronic means, the creditor has a permissible purpose to obtain a consumer report on the applicant, and thus does not need specific authorization from the applicant.

    In order for a creditor to have a permissible purpose to obtain a consumer report to review an account, it must have an existing credit account with the consumer and must use the consumer report solely to consider taking action with respect to the account (e.g., modifying the terms of an open end account).

    A consumer’s written consent qualifies as an “instruction” that provides a permissible purpose under this section if it clearly authorizes the issuance of a consumer report on that consumer.109 For example, a consumer’s clear and specific written statement that “I authorize you to procure a consumer report on me” provides a permissible purpose under this section.


    Would it be acceptable to use a credit report previously obtained 6 months prior to new application? Would any further disclosure be needed stating we didn’t pull new credit at time of application? Just curious is the original disclosure would suffice if we did document where using previous credit pulled. not sure about disclosing this if using a previous credit report used.

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