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Pulling Credit Report w/o Customer Authorization

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Question: 
Can we pull a credit report on a customer without their consent? We have a customer who wants to consolidate some credit card debt. We told her that she needed a co-signer. She gave us her husband's social security number. Can we pull a credit report without his authorization?
Answer: 

This situation would not meet the "permissible purpose" requirement in the Fair Credit Reporting Act which requires that the credit be pulled based on a "business transaction initiated by the consumer."

The permissable purpose for a transaction not initiated by a consumer has to do with obtaining a credit report for the purpose of making a firm credit offer to the customer, (i.e. for mail solicitation.) In this situation you are not making an offer to the husband, the wife is trying to use his credit to secure her loan. Ask her to have him complete a co-signer application prior to obtaining his credit report.

First published on BankersOnline.com 12/5/11

First published on 12/05/2011

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