Permissible purpose is provided for credit report access for many items other than simple applications for new or increased credit.
Included are business transactions intitiated by a consumer for which the business has a legitimate purpose for reviewing a consumer's credit history, employment checks, applications for insurance, review by debt collectors and potential investors, etc.
If the inqiree provides an asserted permissible purpose, they get your CR. That is the extent of FCRA regulation. The statute does not address coding of permissible credit inquiries... coding is the conconction of the CRAs. As such, there is no statutory basis for disputing the administrative coding of inquiries. Disputes over credit inquiries are specifically exempt from the direct dispute process.
Contesting coding is thus an issue of administrative compliance with whatever CRA policies govern such coding.
To my knowledge, there are no guidelines published by the CRAs defining that process. They are not part of the standard credit reporting manual.
How that process works remains, at least to me, a deep mystery. Do inquirees provide the code, or is it interpreted by the CRAs based upon the stated permissible purpose? The FCRA does not mandate providing a reporting code as part of the inquiry process, only the statement of a permissible purpose.
And if, for example, a creditor is making inquiry for consumer initiated credit, which clearly gives rise to reporting as a so-called "hard" inquiry, how do they get it coded as an inquiry that states "permissible purpose for consumer-initiated application for new credit, but dont make the inquiry available to others in the consumer's credit reports"?
That would seem to defeat the entire purpose for including credit inquiries in consumer credit reports. Do the CRAs have such a code, or is it necessary to report it as another, incorrect, type of inquiry code to get it coded as "soft"?
I know of no way to attack a process that is not regulated, and has no administrative rules available to the consumer governing its conduct.
Neither, apparently, did federal regulators when specifically exempting disputes over credit inquires from the new direct dispute process.
