Extension of credit to a consumer is not the only permissible purpose granting a party the right to pull your credit report without first obtaining your express permission.
FCRA 604 also grants permissible purpose to a business if a consumer initiates a business transaction for which there is a reasonable business need to review the consumer's credit history as part of that business transaction.
When a consumer has the ability to end up with a debt owed to the business, even though the transaction does not involve the actual extension of monetary credit to the consumer, that is normally considered as a legitimate business purpose that extends permissible purpose.
Typical examples include apartment rental, utilities, cable, bank accounts, and medical service that is due when provided. Obviously, if allowed to leave the doctor's office without paying in full, then the possibility exists for default on any bill sent to the consumer.
If as part of any business transaction the consumer signs authorization for credit pulls, then no issue of permissible purpose is thereafter relevant.
Express authorization provides ability to pull without any need to show a permissible purpose.
In the cited scenario, the hospital would have permissible purpose until the debt was paid in full.
Thereafter, the business transaction would no longer be pending completion, and thus no permissible purpose would continue.
Thus, if the hospital is continuing to make inquries after the debt is discharged, they would need express consumer authorization.
