The internet is filled with a plethora of advice on credit reports and debt collection these days, but one of the little known facts about debt collectors is that they are legally allowed to access your personal credit report, and they don’t even need your consent to do so!
This might come as a shock to most people, but if you have any outstanding debts or collections, you are definitely going to want to pay close attention to just who is looking into your credit report. And even if your credit report is supposed to be squeaky clean, you still want to be on the lookout for debt collectors with bad information.
Who Can Pull My Credit Report?
Typically, your credit report is only accessed by people you are attempting to borrow money from. Most often, this happens during the process of purchasing a new vehicle or applying for a mortgage. It can also happen if you apply for a new credit card with any of the major carriers or at one of your local stores.
However, the Fair Credit Reporting Act also states that debt collection agencies are permitted to access your personal credit report. They are able to do this in order to confirm that they have accurate contact information for you, and to assess how likely you are to pay off a given debt.
What is a Hard Pull?
When credit issuing agencies like banks and car dealers pull your credit report, there is typically a small, temporary hit to your overall score that accompanies those pulls. This is known as a hard pull.
Unfortunately, any debt collector who pulls your credit history is also going to create a hard pull. So despite the fact that they do not need your consent to look into your credit history, they are viewed in the same light as banks when they make those inquiries.
Will This Impact My Credit Score?
Any hard pull on your credit report will typically have a negative short term impact on your overall credit score, and that includes hard pulls from a debt collector.
Those dings do not typically cause any lasting damage to your credit, but they can still have a pretty serious impact if more than a few happen within a short period of time…especially if they are accompanied by valid collection claims.
How Can I Protect Myself?
The best way to protect yourself from having debt collectors damage your credit score by pulling your credit reports is to make sure that you don’t have any outstanding or delinquent debts.
That won’t, however, protect you from collectors who are researching debts that you never actually incurred. For those situations, the best way to protect yourself is to check your credit report yourself as often as quarterly in order to see who has been making inquiries and confirm that the debts listed on your report are accurate.
Your credit report tells your life story from a financial perspective. In order to make sure that your story is accurate, you need to stay on top of the people and businesses that are writing it. That way, you won’t have to worry about debt collectors looking into it for themselves.