A person's credit report is a written compilation of his lending history, including loans and lines of credit that he has taken out. These reports are drawn up and maintained by credit reporting agencies, which are private companies that help determine a person's creditworthiness. While a person's credit report is not public information, a wide range of people are able to access it. However, to access an individual's credit report, a company must have a legitimate business need.
Debt Collectors
When a company is owed a large amount of money from a debtor who is unable or unwilling to pay, the company will sometimes hire a third-party debt collector to attempt to secure payment on the loan. The debt collector will either outright purchase the debt from the original creditor or it will be hired on commission. As part of securing payment of the debt, the debt collector may wish to check the debtor's credit report.
Legitimate Business Need
According to the Privacy Rights Clearinghouse, access to credit reports is regulated by the Fair Credit Reporting Act. Under this act, a person can access another person's credit report only if the person seeking access has a legitimate business need. Under the act, an acceptable reason for accessing an account is "collection of an account." Therefore, if a debt collector is attempting to secure payment from a debtor, then the debt collector would have a legitimate business need to look at the file.
Considerations
A third-party debt collector would likely be allowed to access the credit report of a person who did not owe it money, albeit only in certain situations. For example, if the debt collector were considering purchasing an individual's debt from a creditor, he might wish to examine the person's credit report before making the purchase. This, too, would be considered a legitimate business need. However, a debt collector cannot access a report for personal reasons.
Consent
In most cases, a person does not have to give his consent to allow someone to look at his credit report. According to the Privacy Rights Clearinghouse, only employers are required to receive the consent of an a current or potential employee before looking at her credit report. However, anyone wishing to look at the credit report of a resident of Vermont must first receive that person's permission before doing so.
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