As anyone who has ever tried to buy a house or apply for a credit card knows, a good credit report is essential to most people in today’s society. Credit reports also contain highly sensitive and personal information. Congress enacted the Fair Credit Reporting Act to prohibit people or businesses from pulling another person’s report unless it is for a valid reason. Violations of the Act can result in damages for the consumer.
What to Know About Judgment Creditors Pulling Credit Reports
A judgment creditor is a party to which a debt is owed that has proved the debt in a legal proceeding. What happens when a judgment creditor wants to pull a consumer’s credit report? The law is not entirely clear. The following is an overview of this important issue:
- The term “credit” was not defined by the Fair Credit Reporting Act until after 2003.
- As a result, before 2003, judgment creditors could usually pull a consumer’s credit report without recourse as long as they intended to use the report for collection purposes.
- In 2003, Congress enacted the Fair and Accurate Credit Transaction Act. The Act defined credit.
- Under that Act, credit is defined as the right granted by a creditor to a debtor to defer payment of debt, to incur debts and defer payment, or to purchase property or services and defer payment.
- Federal courts may apply that definition of credit to a Fair Credit Reporting Act case. This has happened in at least one case.
- As such, judgment creditors for debts that were not initially credit transactions may not be able to pull the debtor’s credit report.
If you believe that your rights under the Fair Credit Reporting Act were violated, it is crucial to seek guidance for protecting your legal rights. We strongly encourage you to contact us today at 804-282-7900 for guidance.