The lender must pull credit reports on all applicants to be certain that the lender and loan purchaser has full and complete information. Pulling a credit report on one applicant might fail to discover that the co-applicant has terrible credit and is using the first applicant to get the loan.
There must be a legitimate business purpose for pulling a credit report. If one spouse applies for a loan with a third party, pulling a joint report would mean that you have obtained a report on the non-applicant without a legitimate business purpose. As such, it would be a violation of FCRA.
First published on BankersOnline.com 2/6/06