topic Re: Permissible Purpose? in General Credit Topics

Permissible Purpose?

catzcradle — Tue, 08 Jul 2008 01:54:27 GMT

Recently I bought a car and there are two new inquiries on my reports - one with American Honda, where I financed the car, and one with the city that I live in...

I had mentioned it before in a post and someone asked why the city had permissible purpose to pull my credit. Well, after doing some reading... I don't know why! What else constitutes PP? I obviously am not borrowing money from the city, and since we do not have a vehicle tax, it can't be for tax purposes. In fact, you aren't even required to register vehicles with the city - only at the state DMV. Could it possibly be the DMV? Why would they need my credit?

Any ideas here?

Re: Permissible Purpose?

Anonymous — Tue, 08 Jul 2008 02:16:53 GMT

Do you have/owe state income taxes?

Message Edited by guiness56 on 07-07-2008 07:16 PM

Re: Permissible Purpose?

Anonymous — Tue, 08 Jul 2008 02:32:53 GMT

Did you sign up for city utilities?

Re: Permissible Purpose?

RobertEG — Tue, 08 Jul 2008 04:22:26 GMT

The FCRA permits credit pulls as a permissable purpose for any "legitimate business need" once you initiate any business transaction with them. It is a wide-open permission.

FCRA § 604. Permissible purposes of consumer reports [15 U.S.C. § 1681b]

(a) In general. Subject to subsection (c), any consumer reporting agency may furnish a

consumer report under the following circumstances and no other:

....

(F) otherwise has a legitimate business need for the information

(i) in connection with a business transaction that is initiated by the

consumer; or

(ii) to review an account to determine whether the consumer continues to

meet the terms of the account.

Re: Permissible Purpose?

Anonymous — Tue, 08 Jul 2008 05:15:48 GMT

I know you specified that your city pulled your report, but is it possible that it was actually your insurance company? Sometimes, when you add another vehicle or modify your policy, they check your CRs. BTDT.

Also, is it possible that when you registered the vehicle, that your local gov could have checked your credit? It wouldn't be a "credit check" per se, but actually an "investigated consumer report" ... perhaps to see if you had issues that might concern them and their extension of a new registration. Such as tickets in another city, unpaid taxes, etc.

Just thinking off the top of my head!

Re: Permissible Purpose?

Anonymous — Tue, 08 Jul 2008 05:18:40 GMT

As mentioned in my post above, the FCRA also allows "Investigative Consumer Reports." Not the same, per se, as a "credit check," but still one that allows businesses and government entities to check your reports.

The only caveat to that is that the requestor MUST obtain permission prior. That could be simply in the form of signing a registration form, or an employment application ...

Re: Permissible Purpose?

RobertEG — Tue, 08 Jul 2008 05:39:11 GMT

Not really true. Prior written permission is only required for employment investigations. Prior permission is not required if you have initiated a legitimate busness transaction. They dont need prior permission to do a credit pull if you initiate busness with them.

Re: Permissible Purpose?

Anonymous — Tue, 08 Jul 2008 06:04:11 GMT

I think you misunderstood my post, Robert.

If a consumer is undergoing an Investigative Consumer Report, prior authorization MUST be made. That can be in the form (as I said) of an employment application, application to rent an abode, in determining insurance rates, etc. It's NOT for extending credit, per se. Consider it more of a "report card" of you, as a person: your character and reputation.

And yes, it must be authorized: whether by signing a form, clicking on an "I agree" checkbox on a web site, etc.

Re: Permissible Purpose?

Anonymous — Tue, 08 Jul 2008 13:06:04 GMT

FCRA § 608. Disclosures to governmental agencies [15 U.S.C. § 1681f] Notwithstanding the provisions of section 604 [§ 1681b] of this title, a consumer reporting agency may furnish identifying information respecting any consumer, limited to his name, address, former addresses, places of employment, or former places of employment, to a governmental agency.

Re: Permissible Purpose?

catzcradle — Tue, 08 Jul 2008 20:09:47 GMT

Do you have/owe state income taxes? / Did you sign up for city utilities?

Nope, just bought a car. The inquiry occurred the day I bought the vehicle. Just as an add, I called the dealership to see if they submitted anything to the city on my behalf. They said no, since vehicles aren't required to be registered in this locality, only licensed with the DMV. The only thing I got from DMV was license plates and registration - which have never resulted in an inquiry before.

I know you specified that your city pulled your report, but is it possible that it was actually your insurance company? Sometimes, when you add another vehicle or modify your policy, they check your CRs. BTDT.

Also, is it possible that when you registered the vehicle, that your local gov could have checked your credit?

Wonderin - My insurance company's office is in a different locality, so I can't imagine why it would have shown up as my city's name. I thought about the registration thing, but the vehicle isn't registered because it isn't required anymore. The city is my only local gov other than state. :/

The FCRA permits credit pulls as a permissable purpose for any "legitimate business need" once you initiate any business transaction with them. It is a wide-open permission.

FCRA § 604. Permissible purposes of consumer reports [15 U.S.C. § 1681b]
(a) In general. Subject to subsection (c), any consumer reporting agency may furnish a consumer report under the following circumstances and no other:

....

(F) otherwise has a legitimate business need for the information
(i) in connection with a business transaction that is initiated by the consumer; or
(ii) to review an account to determine whether the consumer continues to meet the terms of the account.

I'm guessing this is what it would fall under, I'm just trying to figure out what their "legitimate business need" was, since cars are not taxed and aren't required to be registered.

*sigh* I tried phoning the city treasurer... the number gives me a "Press 1 to pay your water bill, press 2 to leave a message." And of course, no one has called me back... I want to call someone else but I don't know who!

Not that the inquiries are a HUGE deal, I just wish I understood why...

Re: Permissible Purpose?

Anonymous — Tue, 08 Jul 2008 20:29:07 GMT

Any unpaid parking tickets or moving violations?