Is it ever OK to pull someone else’s credit file? It depends. If you suspect elderly or minor fraud or even infidelity, you can if you obey the rules
Can you pull someone else’s credit report?
Absolutely, and there are a number of circumstances when you ought to. Consumer credit reports and credit scores can provide valuable insight into an individual’s finances. With them, you can reduce risk, save money and even help someone offset trouble.
Permission and purpose to pull
Before you even attempt to review another’s credit file, however, you should know the rules. In most cases, you’ll need permission from the other person before pulling personal data. “The Fair Credit Reporting Act (FCRA) allows an individual to access another’s credit report if they have a credit authorization,” says Jeremy Maher, founder of the credit education program Credit Repair Doctor. You’ll also need a “permissible purpose.” In general, this means a legitimate business reason, such as offering someone a loan, employment or a home. Other FCRA-approved reasons include helping someone guard against fraud or validating the financial circumstances of a person in a child support case.
In a few circumstances, you can check without authorization, such as when you’re granted that action by a government agency or court of law or to access a minor child’s file. The same is true if you have power of attorney, which allows you to make financial decisions for someone when they’re physically or mentally unable to do so.
Ultimately, there is a major difference between asking a person to share a credit report with you and actually pulling it on their behalf. You don’t need to follow the FCRA in the former situation, but you do in the latter. Ignore these rules at your peril. If you acquire someone’s credit report illegally, that person can sue for damages with fines up to $1,000 and tack on attorney’s fees, too.
Assuming you have the formal go-ahead, you can get the reports directly from either the credit bureaus (TransUnion, Experian and Equifax) or via AnnualCreditReport.com. Unlike a bank or other business that has direct access, you’ll need to provide a considerable amount of the other person’s identification details. This includes legal name, home address, Social Security number and date of birth. Additionally, says Maher, you’ll also be instructed to answer such questions as: “What was the name of the bank you had your car loan through in 1998?” and “What is your current payment on your home mortgage through X bank?” So, unless you’re privy to that type of information, you’ll probably need the person accessible during the process.
Depending on the circumstances, you may also want to take a look at credit scores, too. These numbers offer an immediate indication of a person’s risk level at that moment. Most lenders use FICO scores, which range from 300 to 850. As with reports, you’ll have to get the person’s involvement and approval before access. And the scores aren’t free — you or the individual will have to pay about $20 at MyFICO.com.
When to check and what to look for
There are seven times when pulling the credit curtains wide open makes sense. But to make an accurate assessment, you should also know what to focus on for each situation.
- To guard against identity theft after your spouse has died. Sadly, fraudsters (and even some family members) have been known to target the identity and credit of those who have died. You can prevent this from happening by alerting the three major credit reporting bureaus and requesting the credit files as soon as possible. These thieves tend to strike in the immediate days and weeks following a death. To gain access to the deceased’s credit files, you’ll need to submit an original of the person’s death certificate and detailed personal identification information (which may vary by credit bureau). Also, request that a “do not issue credit” notation or credit freeze be added to the report, and that you want to be notified if someone attempts to open an account in his or her name.
- To see if your child’s credit has been compromised. Is your child getting credit card solicitations in the mail? If so, you may want to contact the credit bureaus to check for fraud. Identity thieves sometimes target minors, and you’ll want to discover problems before your child turns 18 and begins applying for student loans or if you want to add him to your credit card account. Mistakes can also happen, warns Maher, such as your credit history appearing on your child’s report because you share the same name (especially if your son is a “junior”). Identify any account that shouldn’t be there and dispute them with the credit bureau. You typically cannot pull a credit report online for a minor, but will have to call the credit bureaus directly. If you suspect fraud, you’ll have an easier time accessing your child’s credit reports (if they exist) by contacting the ID Theft Resource Center.
- Concern about an aging parent’s finances. Children aren’t the only loved ones who can warrant a credit report check. Senior citizens are also typical targets of fraud. Zero in on loans and lines of credit that your mom or dad never signed for or on unusually high balances on legitimate accounts. Thieves or other unsavory souls sometimes convince the elderly to open new accounts or to add them as co-signers or users. “While you can’t control [your parents] or their actions, finding this out early and pointing out what has happened may convince them they have been duped and prevent them from doing something like that again,” says Wayne Sanford, president of the credit consulting company New Start Financial. If you worry that your parents are applying for random cards or making irrational charges because they are suffering from dementia, check the reports for evidence of that as well. To see the report, you will need to obtain power of attorney or court-ordered guardianship, and provide that documentation in writing to the credit reporting agencies.
- When hiring someone. As a sole proprietor, you may be in the market for a little help. Before hiring an employee, you can request to see a recent copy of her credit report, especially if she’ll have access to your funds or private information. In most cases you’ll want to see a track record of well-managed accounts. However, says Hankins, “If you’re looking for a motivated salesman, high debt may actually be advantageous. He may be motivated to sell for you just to pay it off.” In addition to a credit report, you may also want to run a background check, says Tracy Becker, president of Northshore Advisory, a credit education and restoration company. “You can pull limited information. such as criminal records, public records and even find date of birth, addresses and any aliases that individual might have used.” Background checking companies like Snoop Station and US Search provide limited information for free and more extensive data for a fee.
- To see if your sweetie’s a keeper. Relationship getting serious? Take a peek at your potential life partner’s credit report. Since you’ll be merging finances, learning how he or she’s been managing money is essential. You may be able to excuse a bit of debt or a missed payment, but, warns Sanford, “if you see a consistent pattern of horrible payments, then that should be a huge issue for you.” Besides big credit card balances, Sanford says to look for cellphone and utility bill collections and car repossessions. Oh, and want to live or buy a home together? “If you see an apartment collection, understand that a mortgage lender will probably not give you a loan.” The best approach to doing this is to either have your intended present you with a current copy of his or her credit report or you can both set aside time to pull and review your credit reports together.
- You think your spouse is cheating. No need to hire a private eye; evidence of a lover may be revealed on a credit report. Scan it for new accounts at specialty stores like those that carry mainly lingerie or luxury items for which you’ve never been the beneficiary. It may be as simple as a new credit card, says Sanford. “Why did he get it? Why is the bill going to his work address and not home?” Legally, you can’t access a spouse’s reports in secret (though many a suspicious mate has done so), but you certainly have the right to demand it be turned over for inspection.
- Considering a potential roommate. Landlords and building managers often request credit reports before approving a tenant. Prior to bringing a stranger into your home as a roommate, you may want to do the same. Focus on current, not older issues. “Concentrate on missed payments and negative items over the past one to two years,” says Maher. “If they had a financial issue three-plus years ago and their credit has been clean since then, those financial problems are probably in the past.” Again, the preferable approach would be to ask to see a recent copy of the credit report rather than pulling the report yourself, even if you have permission.
Verify before jumping to conclusions
One final thought: Don’t be too hasty in drawing conclusions from a credit report. Credit reports and scores aren’t updated overnight, and many contain errors. According to Maher, it’s common for people reading other people’s reports to freak out unnecessarily. “Your emotions can flood your judgment. If an account is closed, sometimes the bureaus may still show it as open,” says Maher. “Then you say, ‘You told me you closed the accounts, you lied to me!'”
So when using consumer credit reports to formulate conclusions about someone’s borrowing and repaying habits, ask the person about what you see that’s alarming. Let the report open the conversation, not shut it down.