Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) regulates the consumer credit reporting industry
and companies including banks, that use credit information provided by others who supply
such information. This act
- Requires that users of credit reports must always have a legitimate purpose for the credit report
- Explains how information from a credit reporting agency should be handled
- Prohibits Eastern Bank and the Agency from disclosing credit report information
- Requires users to disclose to the consumer, if credit is denied, the fact that they have obtained credit information from credit reporting agencies or other sources
Let’s look how FCRA applies to you.
- Legitimate purpose for pulling a credit report.
It is important for you not to pull a credit report on a potential applicant. For example, an applicant says he isn’t sure whether he would qualify for a loan and he would like to know before he spends the time to complete an application. If you have the ability to pull a credit bureau through your agency, never pull a credit bureau to review the individual’s credit status. It is against the law for you to do so. You must have a bona fide reason for pulling a credit bureau and to just review an individual’s credit is not an appropriate reason.
- Do not share credit report information with applicant.
If you have pulled a credit report based on a legitimate insurance purpose, do not share that information to the customer.