utility companies and hard credit checks.

Anonymous · ‎02-04-2016

Hello. I recently had my internet provider (Century Link) request a Hard Credit check on my account. At the time I was upgrading an existing service and did not request any new services (in fact I had to decline several in the course of the conversation). No one asked for my permission to run a credit check. Is this considered legal under the FCRA? I understand that utlitiy companies are included in the list, but it seems to me that one should (at the very least) be informed that a credit check will need to be performed. I don't believe it should be legal for vendors to (potentially) negatively impact your credit without your knowledge or consent. Appreciate any help you can provide.

RobertEG · ‎02-04-2016

Yes, it is legal

The FCRA defines certain types of inquiries that, based on their nature, proivde their own "permissible purpose."

They are defined in section 604.

The intent is to facilitate the conduct of credit and business transactions by permitting inquiries without the need for express authorization by the consumer.

Otherwise, business and credit related transactions would come to a crawl.

A business transaction that is not the extension of credit has permissible purpose if (1) the transaction was initiated by the consumer, and (2) the business transaction has a legitimate need for the business to review the consumer's credit as part of the transaction.

Utiliites that provide services for which the consumer is billed have been held to have a legitimate need to review a consumer's credit.

Your recourse is to contact the company and request their voluntary recoding of the inquiry as a soft pull, and thus removing the impact on your credit.

Anonymous · ‎02-04-2016

Thanks for the input!

takeshi74 · ‎02-05-2016

A hard pull typically has a small impact despite the obsession over them. That said, impact can be bigger for those with thin and/or poor credit profiles. Even so, the impact of an HP tapers and falls off relatively quickly. A business only needs permissible purpose as explained above.