# Can Credit Reports be done without your knowledge (and approval)? **URL:** \ **Category:** Factual Questions\ **Created:** [May 21, 2005, 4:44pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882 "2005-05-21T16:44:35Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [May 21, 2005, 4:44pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/1 "2005-05-21T16:44:35Z")
From [this](http://boards.straightdope.com/sdmb/showpost.php?p=6179015&postcount=100) post; > [@](#): > > \*\* > Originally Posted by E-Sabbath - > Cat? NEVER EVER let a salesman have your driver’s license until you’re ready to finalize a deal. He will use it to run a credit report on you. Each credit report run on you lowers your credit score. And that’s not even going to ‘would you let a car salesman know where you live’ status. \*\* I don’t think people are allowed to run a credit report on you without your knowledge (and signed consent), but I most definitely could be wrong about that, and I would like to know the skinny on this. Can people (like car dealerships and landlords) run my credit report any time they get their hands on my personal information (like my driver’s license)? ---
**Author:** ![E-Sabbath](https://avatars.discourse-cdn.com/v4/letter/e/e19adc/32.png) [@E-Sabbath](https://boards.straightdope.com/u/E-Sabbath)\ **Post date:** [May 21, 2005, 5:03pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/2 "2005-05-21T17:03:59Z")
Here’s a report saying they do, legal or not. Public Citizen, are you familiar with them? [http://www.counselorlibrary.com/general/general\_01232004040106\_838.pdf](http://www.counselorlibrary.com/general/general_01232004040106_838.pdf) This is not the information I was working from, I recall it from Edmunds, I recall, but I may be wrong. ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [May 21, 2005, 5:10pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/3 "2005-05-21T17:10:24Z")
I’ve definitely got to find out more about this. I’m test-driving cars all the time these days, and they all want my driver’s license to let me test drive. In Alberta, we recently got some heavy-duty Privacy Laws (FOIP and PIPEDA), and I’m pretty sure that running a credit report on someone without their knowledge or consent would be in violation of that, but like you say, if they do it anyway, what protection does the consumer have? ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [May 21, 2005, 5:18pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/4 "2005-05-21T17:18:56Z")
> [@featherlou](#): > > From [this](http://boards.straightdope.com/sdmb/showpost.php?p=6179015&postcount=100) post; \*\* > > I don’t think people are allowed to run a credit report on you without your knowledge (and signed consent), but I most definitely could be wrong about that, and I would like to know the skinny on this. > > Can people (like car dealerships and landlords) run my credit report any time they get their hands on my personal information (like my driver’s license)? I am not a lawyer, but I am not aware of any organization that requires consent before running a credit check. As far as I know, anyone with an account at a credit agency can run anyone. Of course it costs them $ so they don’t bother unless they have a reason, but the idea that your credit history is private or under your control-what gives you that idea? 😕 It is information about you and is owned by the agency that compiled it. In order to fend off legislation limiting their business, credit agencies tend to talk about how sensitive they are to individual concerns, but they are businesses, not civil libertarians. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [May 21, 2005, 6:29pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/5 "2005-05-21T18:29:23Z")
It will show up on your credit report as an “inquiry”. Too many of those can hurt your score. One or two a month don’t mean anything bad AFAIK, and they go away fast. BUT- if I was just about to buy a house, I woudn’t go into an orgy of test-drives or applyng for new credit cards. A CreditCard company can & will run a CR on you if: they are thinking about increasing your limit, you have had some unusual activity, or even to make you a new card offer. Or because it’s Tuesday. (Your local laws may vary) This is one of the reasons FICO is bullshit. Just by odd chance- by no fault of yours and nothing you can do to stop it- you can collect enough “inquiries” to reduce your FICO score by a bit. ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [May 21, 2005, 6:31pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/6 "2005-05-21T18:31:35Z")
> [@](#): > > Section 604(a)(3)(F) permits CRAs to provide consumer reports to any party who has a “legitimate business need for the information in connection with a business transaction that is initiated by the consumer.” You ask whether this provision allows a dealer to obtain a consumer report on a person who “comes to an automobile dealership and requests information” from a salesman about one or more automobiles. In our view it does not, because a request for general information about products and prices offered does not involve a business transaction initiated by the consumer. > > More generally, you ask “when is the beginning of a business transaction” initiated by the consumer? In responding to this question, it is important to note that Section 604(a)(3)(F) limits this “business need” permissible purpose to transactions (i) that are “initiated” by the consumer and (ii) where the seller has a “legitimate business need” for the information. **The staff’s view is that an automobile dealer may obtain a report only in those circumstances in which the consumer clearly understands that he or she is initiating the purchase or lease of a vehicle and the seller has a legitimate business need for the consumer report information in order to complete the transaction.** Source: [FTC Staff Opinion Letter: Fair Credit Reporting Act Section 604](http://library.findlaw.com/1998/Feb/11/128453.html) We bought a new vehicle two months ago. Prior to taking test drives of vehicles, the dealers took photocopies of my driver’s license. I attached a copy of the above letter to their photocopy and had the dealer initial it. After the test drives I took back the photocopy from every dealer. We bought our vehicle from the only dealer who did not object to this. ---
**Author:** ![Annie-Xmas](https://avatars.discourse-cdn.com/v4/letter/a/ecc23a/32.png) [@Annie-Xmas](https://boards.straightdope.com/u/Annie-Xmas)\ **Post date:** [May 21, 2005, 6:33pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/7 "2005-05-21T18:33:04Z")
I work in real estate, and let me tell you: Nobody is suppose to run a credit report without your written consent. If anyone does and gets caught, things can get very very ugly. ---
**Author:** ![AskNott](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asknott/32/5790_2.png) [@AskNott](https://boards.straightdope.com/u/AskNott)\ **Post date:** [May 21, 2005, 6:42pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/8 "2005-05-21T18:42:46Z")
According to _Consumer Reports_ magazine, car dealers can, and routinely do, check the credit of any potential customer who walks in and gives a name and address. The credit checking firm has the right to sell a credit report to anyone who has a legitimate business reason\* to get one. The car dealer, who hopes to set up a car loan for you, can properly do so. So can a landlord who is about to rent you an apartment. The problem is, if you go to a dozen dealers before you buy, that cluster of lookups in a short period of time is a caution flag. It looks like you just borrowed a bunch of money from a dozen places. So, yes your credit rating could suffer. \*If you just want to dig up some dirt on your neighbor or the guy who “stole your gal,” that’s not a legitimate business reason. ---
**Author:** ![Balthisar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/balthisar/32/2825_2.png) [@Balthisar](https://boards.straightdope.com/u/Balthisar)\ **Post date:** [May 21, 2005, 6:45pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/9 "2005-05-21T18:45:58Z")
There are _different types_ of credit reports. Your existing creditors can run reports at any time. They show up as a different type of inquiry and don’t affect your score. Additionally the credit reporting agencies sell your information to potential creditors. I _believe_ these inquiries don’t show up at all. It’s pretty much like this: Potential creditor buys a list of all 18-24 year old non-college graduate males who have a credit score below 600 so they can send them horrible pre-approved offers. This shouldn’t show up, because there’s on actual inquiry; it’s just a mailing list. There’s an insurance inquiry that’s been legalized a few years ago. (You’re entitled a free copy of your insurance credit report any time information on this report has been used to affect your insurance rate.) This shouldn’t affect your credit score, because it’s not a credit inquiry. Now the car one’s a toughy. Normally, I’d say it’s the equivilent of personally applying for credit. This is done per your request as someone that is seeking credit. This _definitely_ would count on your credit score, because it’s a deliberate action by you in order to procure more credit. The reason this is a toughy is because I don’t know if the car dealer can differentiate between a “wants credit” report, or a “we’re a creditor” report (as above). Obviously test driving should _not_ be implied consent on your part to have the dealer run a credit report on a “wants credit” basis. On the other hand, you’re taking one of their $32,000 vehicles for a spin, and they want to make sure you’re not going to get funny with the car, so I think they’d be justified in a “we’re a creditor” type of inquiry that doesn’t affect your score. ---
**Author:** ![bare](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bare/32/471_2.png) [@bare](https://boards.straightdope.com/u/bare)\ **Post date:** [May 21, 2005, 9:15pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/10 "2005-05-21T21:15:18Z")
I pull credit reports on ALL potential tenants, but they are very much made aware of the fact when they fill out their applications. I need their full names, Social Security numbers, date of birth and current address, along with a signature and date, right under the statement: **I represent that the information provided in this application is true to the best of my knowledge. You are hereby authorized to verify my credit and employment references in connection with the processing of this application.** ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [May 21, 2005, 9:26pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/11 "2005-05-21T21:26:55Z")
> [@Duckster](#): > > Source: [FTC Staff Opinion Letter: Fair Credit Reporting Act Section 604](http://library.findlaw.com/1998/Feb/11/128453.html) From reading several opinions from the FTC staff, clearly my statements earlier about when a credit report can be obtained are incorrect. :smack: The intent of the fair credit reporting act requires knowing consent before a credit report can be run. There are lots of ways companies try to get around that, perhaps successfully, but the intent is clearly that the consumer has to agree to the seller obtaining a credit report. As far as I know, there is no requirement that the seller prove he/she has that consent before running the CR, but doing so appears to be a violation of the law. So, assuming everyone in business in honest, there should be relatively few problems. :rolleyes: ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [May 21, 2005, 9:47pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/12 "2005-05-21T21:47:07Z")
Why would a car dealer run a CR on everyone who walks into the shop? Presumably that would get kinda expensive. Wouldn’t it be more prudent to only run reports on people who are planning to buy? ---
**Author:** ![TellMeI\_mNotCrazy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tellmei_mnotcrazy/32/3419_2.png) [@TellMeI\_mNotCrazy](https://boards.straightdope.com/u/TellMeI_mNotCrazy)\ **Post date:** [May 22, 2005, 12:47am UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/13 "2005-05-22T00:47:28Z")
I think a lot of the times, it’s in the hopes of knowing whether to really push that person who is test-driving to buy. You get a test driver with a brilliant credit score, and it’s suddenly a lot more worth your while to start laying on the sales tactics. My credit? Not so hot. After test driving, the chatty, amiable salesperson walks into the office to get my license and comes back out a little more cool and reserved - probably saving his energy for someone more likely to get approved. ---
**Author:** ![Cyros](https://avatars.discourse-cdn.com/v4/letter/c/a698b9/32.png) [@Cyros](https://boards.straightdope.com/u/Cyros)\ **Post date:** [May 22, 2005, 2:34am UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/14 "2005-05-22T02:34:49Z")
> [@featherlou](#): > > From [this](http://boards.straightdope.com/sdmb/showpost.php?p=6179015&postcount=100) post; \*\* > > I don’t think people are allowed to run a credit report on you without your knowledge (and signed consent), but I most definitely could be wrong about that, and I would like to know the skinny on this. > > Can people (like car dealerships and landlords) run my credit report any time they get their hands on my personal information (like my driver’s license)? I don’t think this happens here (in Canada). Yes, when I want to test drive a car, without a salesperson in the car, they ask to see or copy my licence. That’s standard operating procedure here. They need to be sure I have a license and they need some form of identification in case I decide to take off. I’m sure if you objected to having your licence copied, a salesperson could accompany you on the test drive (although they should still ensure that you have a valid licence, of course). I’ve seen my credit report and not noticed any inquiries being run without my explicit consent. FWIW, when I worked at the bank, I was told that inquiries don’t really affect your credit here. Applying for multiple sources of credit in a short period of time is huge red flag. Having too much available credit from various sources is a concern (because you could potentially max out all your credit at once and have trouble handling the debt). Inquiries, not so much. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [May 22, 2005, 3:04am UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/15 "2005-05-22T03:04:38Z")
[http://www4.law.cornell.edu/uscode/html/uscode15/usc\_sec\_15\_00001681---b000-.html](http://www4.law.cornell.edu/uscode/html/uscode15/usc_sec_15_00001681---b000-.html) is the relevant section. There are lots of valid reasons for which a creditor can pull your report. \*\*Balthisar’s \*\* deal with the purchase of lists is dealt with in subsection ©. Notice that the inquirer does not actually get a credit report under this provision, and the creditor can only do it for limited reasons. Similarly, there are circumstances that impose notice requirements (e.g., employment related inquiries and inquiries that result in adverse credit decisions). Section 1681q imposes penalties for pulling a credit report under false pretenses. Most CRA contracts include a warranty that the creditor will only pull reports for reasons permitted by the statute. ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [May 22, 2005, 5:11am UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/16 "2005-05-22T05:11:04Z")
Well, we went out test-driving vehicles this afternoon, and one dealer copied my license and one did not. I asked the one that did why he wanted my license, and if he would run a credit report on it, and he said it was only to ensure that I didn’t abscond with the vehicle, and that a credit report would not be run. I have only his word, of course, but it does seem to me that it would be more hassle than it’s worth to run a report on every customer that test drives a vehicle. They can run it once I offer to purchase a vehicle, with my blessing. I guess I could always request a copy of my credit status and see if a whole bunch of hits have come in while I’ve been looking for cars. ---
**Author:** ![Savannah](https://avatars.discourse-cdn.com/v4/letter/s/b3f665/32.png) [@Savannah](https://boards.straightdope.com/u/Savannah)\ **Post date:** [May 22, 2005, 4:37pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/17 "2005-05-22T16:37:08Z")
You can definitely fax Equifax and ask for a copy of your own credit report, featherlou. Might take 'em a while to get it to you, though, I’ve found. I am in BC and we do not run a credit check on a potential tenant unless 1) they have signed and dated the application to rent, which has a paragraph just above their signature indicating that they are giving me/us consent to do a tenant reference check and obtain personal information including a credit check blah blah, and 2) if the application is good and it looks like they’re likely to get the property they’re applying for. ---
**Author:** ![Savannah](https://avatars.discourse-cdn.com/v4/letter/s/b3f665/32.png) [@Savannah](https://boards.straightdope.com/u/Savannah)\ **Post date:** [May 22, 2005, 4:41pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/18 "2005-05-22T16:41:20Z")
To clarify, sorta, if we have five sets of applications to rent a property, the property manager will ask for a credit check on maybe one or two of the most promising, or to see if there’s something in there that could help her decide who to approve. So we don’t run credit checks on every single application to rent with us, not by a long shot. If applicants don’t sign and date the form indicating their permission, I am not allowed to do a credit check. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [May 22, 2005, 10:40pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/19 "2005-05-22T22:40:25Z")
Most CRAs require a social security number to pull a credit report. In fact, I don’t know of any that don’t. YMMV. ---
**Author:** ![Muffin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/muffin/32/4341_2.png) [@Muffin](https://boards.straightdope.com/u/Muffin)\ **Post date:** [May 22, 2005, 10:41pm UTC](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882/20 "2005-05-22T22:41:34Z")
Privacy legislation differs by jurisdiction, so what people tell you about their rights in various provinces and states is not relevant to the law in Alberta, and anything I say here is only about Alberta law and should not be applied elsewhere. Alberta has enacted PIPA, which is substantially similar to the federal PIPEDA. PIPA applies to your situation, and PIPEA would also apply if your credit file includes credit information collected, stored or disclosed from outside of Alberta, but let’s go on the assumption that your credit information is from and in Alberta. PIPA lets a credit reporting agency disclose your personal information as long as it follows Alberta’s Fair Trading Act, which in turn allows the disclosure without your written consent if there are reasonable grounds to believe that the person requesting the information intends to use the information in the report in connection with the extension of credit. That means that if it you tell the salesperson that you will need credit, then the salesperson is free to request and receive a credit report without further permission from you. If all you are doing is going for a spin to consider if you want to buy a car or not, and you have made no indication that you are in need of credit, then the salesperson is not permitted to request or receive a credit report. As you can see, it comes down to either trusting that the car salesperson knows the law and will follow the law, or you getting the salesperson to promise that a credit report will not be requested or received until you provide written authorization. Since it is hard to prove a verbal promise, having the salesperson sign and date/time a written note to that effect would be wise if you expect to make a complaint to the Privacy Commissioner. You can read the provincial acts at: [http://www.qp.gov.ab.ca/catalogue](http://www.qp.gov.ab.ca/catalogue) You can read the federal act at: [http://laws.justice.gc.ca/en/p-8.6/93196.html](http://laws.justice.gc.ca/en/p-8.6/93196.html) [Next page](https://boards.straightdope.com/t/can-credit-reports-be-done-without-your-knowledge-and-approval/304882.md?page=2)