Your credit report and score affects your financial life in many ways. Insurance companies, financial institutions, employers and even landlords all are interested in your credit report. A credit report is a juicy piece of information for your potential creditors, because the information contained in it is an indication of your ability and past history of paying your bills. Credit reporting is governed by the federal government under the Fair Credit Reporting Act, which states that your credit report cannot be checked without your authorization.

Fair Credit Reporting Act

The permissible use of your credit report falls under section 604 of the Fair Credit Reporting Act. In general, a creditor can pull your credit report only with your express written authorization. The exception to the rule is a court can order the release of your credit report in connection with proceedings before a federal Grand Jury. You also can pull the credit report of someone if you hold his power of attorney, which grants you written authorization to represent that person’s business affairs.

Recourse

If a creditor checks your credit report without your permission, you have some options. You can sue in state or federal court as long as you abide by the statute of limitations, which is two years after you discovered the violation or five years after the violation, whichever occurs first. Your award if successful depends on the type of case: willful or negligent. In either case, you can pursue actual damages (the amount the unlawful check of your credit report cost you) or the statutory limit, which is $1,000 for a negligent case or up to $1,000 for willful violations.