Credit Report Authorization Form (Guide & Overview)

A credit report authorization form is a document used to obtain an individual’s permission to request their credit reports. It gives creditors, employers, or landlords a legal basis ground to view someone’s credit report. A credit report is a detailed summary of a person’s credit history.

It is the information in the credit report that credit bureaus use to determine a person’s credit score (a three-digit number that reflects how well they handle credit). This number is needed in determining how high or low their interest rates should be and what kind of deals they can get on credit. Signing a credit report authorization gives a requester access to a person’s credit report. However, the requester must comply with the guidelines of the Fair Credit Reporting Act.

Credit Report Authorization Laws

Fair credit reporting act

The Fair Credit Reporting Act protects a person’s credit information while it is with a creditor or any other party with access to it.

It prevents third parties from mishandling the individual’s private information. It also defines the type of information credit bureaus are allowed to collect about their customers.

When a person signs a credit report authorization form, creditors, landlords, and employers can access his credit report. However, they must keep with the rules of the Fair Credit Reporting Act.

15 U.S.C. § 1681

The Fair Credit Reporting Act was established in 1970 to regulate how an individual’s personal credit information is handled. The government decided to implement this act to promote fair and accurate reporting and ensure that reasonable procedures are followed in handling requests for an individual’s credit information. Both the Federal Trade Commission (F.T.C.) and the Consumer Financial Protection Bureau are responsible for overseeing the act’s implementation. It covers the duration for which a person’s credit report can be kept, who it can be shared with, and the methods with which the information can be obtained.

Landlord (Tenant) Background Check

In some cases, landlords would demand to screen potential tenants before deciding to lease them a house. A landlord (tenant) background check form grants the landlord permission to perform a background check on a potential tenant. It allows the landlord to view the potential tenant’s credit history, criminal records, and even rental history. When a tenant signs this form, he is authorizing the landlord to inspect his records. Tenant background checks cost between $18 to $75. The tenant usually pays this fee.

Basic Components of a Credit Report Authorization Form

Before any requester is given access to a person’s credit report, the individual must first grant them access by filling a credit report authorization form. In this section, the individual giving consent via the credit report authorization form will be referred to as ‘the applicant.’ The person requesting the credit report will be referred to as ‘the requester.Any credit authorization form should have some basic information included in it. The applicant must provide all this information to enable the credit bureau to obtain all their details.

A well-written form should contain:

Full names for the authorized party

Both the applicant and the requester will be required to write their full names in the form.

See an example below:

“With my signature below, I, APPLICANT’S FULL NAME, authorize REQUESTOR’S FULL NAME to perform a background check on me and obtain my credit report.

“Usually, there is another section where only the applicant is expected to fill in their full name. It’s easy to notice. See an example below:

APPLICANT DETAILS Applicant Name: _____________________________

The applicant is required to write the same name in both sections to avoid any problems with the document.

Applicant’s social security number

The requester must be required to provide his/her complete social  security number. This will help the credit bureau identify the applicant and find their records. Due to the FCRA, this number cannot be fully displayed by the requester.

Applicant’s date of birth

The applicant should be required to provide his/her full date of birth with the exact date, month, and year. The bureau demands all this information to avoid any possible identity theft.

Applicant’s driver’s license number

The applicant should be expected to write down his/her driver’s license number. This can be found clearly written on their license. They can also check relevant documents like their vehicle registration for their license number.

Applicant’s Residential history for the past seven (7) years

This provides additional information about the applicant. The applicant should be expected to give details of all his addresses within the past seven years. This section should contain the address, state, city, zip code, and duration of stay at each location.

Signature

There is always a section at the bottom of any credit report authorization form which both parties must sign. Adding a signature indicates that the applicant has allowed the requeste to view their credit report.

The date at the bottom

The date column is usually right next to the signature. The date when the form was signed must be clearly stated at the bottom of the document.To see a more detailed sample, you can download any of our templates here.

Important Considerations During the Process

Any party that requests a credit check on an individual must be ready to comply with the Fair Credit Reporting Act regulations. According to the act, no requester – an employer, insurance company, landlord, or creditor – can access a person’s credit report without their consent.There are a number of things to consider when obtaining consent to view a credit report.

Some of them include:

Fair Credit Reporting Act relevance

This act is crucial for protecting the applicant’s privacy and information. Thanks to the Fair Credit Reporting Act, all the power doesn’t belong to only the big credit bureaus. People have certain rights and privileges as regards their credit information. These rights should also be clearly stated in the credit authorization form.

Some of these privileges include:

Guaranteed Privacy

This means that only a few people who have a justifiable reason for viewing a person’s credit history can access it. Individuals also have access to information about who requests their credit information. This means that they can know if a creditor, landlord, or employer has pulled their credit report within the past year.

The FCRA ensures that everyone’s personal information is kept safe. Credit bureaus are not allowed to display people’s complete social security numbers or credit card details publicly. Medical information is also not allowed to be a part of the report.

Precise reporting of data

According to the FCRA, a person can dispute any information that they consider to be inaccurate. The credit bureau is mandated to verify the information within 30 days. If it can’t be verified, it will be removed from the report.

Access to credit score and credit report

The FCRA mandates that everyone has the freedom to request their credit information whenever they need it. Apart from credit reports, credit bureaus also give credit scores to individuals based on their credit history. They can also request this information.

Removal of negative information after seven years

Based on the FCRA, any harmful information in an individual’s credit report can be removed after seven years. This, however, doesn’t apply to bankruptcy (which can remain for up to 10 years) and criminal records (which can remain indefinitely).

Freedom to seek damages

The FCRA also states that the person who gave consent is free to take legal action if any party chooses to violate the act. They can demand that the violating party pays for any form of harm they may have incurred.

Cost of obtaining a credit report

Credit bureaus usually charge between $25 – $70 per applicant. The fee depends on the information that is demanded.

Time period expected

If the application is carried out online using www.AnnualCreditReport.com, it only takes a day or two to get access to a credit report. However, if you make the request by phone or mail, it could take up to fifteen days from when the company receives your request. The length of time to get a credit report is not fixed. Sometimes the credit bureaus might take longer to verify the applicant’s identity. This extends the waiting time by a few days.

Steps involved in Obtaining Consent

The process of obtaining consent to view a person’s credit report is easy. It just requires a few steps. They are:

Step 1: Explain the purpose to the individual

The requester must carefully explain to the applicant that they would need to access their credit information. Then the applicant should be given reasons why this request is necessary. They should be assured of their privacy and aware that they can take legal steps if their privacy is violated. If the applicant agrees, he or she would then provide all the required personal information. If the requestor is not going to pay for the credit report, they should inform the applicant how much it would cost to request their credit report.

Step 2: Completing the form

The requester should require the applicant to complete the form by filling all the necessary fields with the required information. After this, they should be required to give the form to the requester.Usually, the requestor is informed that he been granted access to view the applicant’s credit history about one or two days after the form is submitted. If this request is several times within a short time frame, it can be classified as a single search. In such cases, the individual’s credit score remains unaffected.

Step 3: Obtaining a signature

The requester must then obtain a signature from the applicant.Obtaining the signature is compulsory and must be done right. All signatures must be either handwritten or gotten electronically using DocuSign, AdobeSign, or any other electronic signature platform.

Step 4: Run the credit report

It takes only about one or two days for the requester to run a credit check and obtain all the necessary information on the person’s credit history. Different companies like Experian, www.E-renter.com (for landlords), and www.AnnualCreditReport.com offer credit check options but, one of the most common choices is Experian. Experian charges the consenter about $14.95 for access to credit information for 30 days. The requestor is given access only after their identity is verified.

Step 5: Review and give a copy to the consenter (if asked)

The creditor (landlord, insurance company)

He can then decide after looking at the individual’s credit report. The individual should be informed of the decision and given a copy of their credit report if they demand it.

Financiers

If a credit report was requested to determine if the individual was eligible for a loan or mortgage, the credit report should be provided to the individual upon approval of their request.

Housing

Landlords can choose to go over aspects of the credit reports with their potential tenants. There may be inaccurate details that can only be clarified by reviewing the credit report with the individual. After review, the landlord can choose to accept the individual as a tenant. In such a case, a letter stating their approval must be sent to the person.

However, the landlord can also opt not to accept the potential tenant. If they choose to reject the person, they have to send a letter informing the individual of their decision. They must also clearly state the reason for their rejection and details about the company that ran the credit check. Failure to do this will be a breach of the Fair Credit Reporting Act.

Free Forms & Templates

Preparing a legal document like a credit authorization form can be time-consuming. You could omit vital details or fail to state important information resulting in legal complications. You can save a lot of time and be assured of a well-prepared document by downloading any of our free templates here.

Credit-Report-Authorization-Form-01_

Credit-Report-Authorization-Form-02_

Credit-Card-Authorization-Form-03_

Credit-Report-Authorization-Form-04_

    Conclusion

    A credit report authorization form is needed for creditors, landlords, and employers to obtain information about potential clients and make the right decisions for their businesses. It is the only way to access a person’s credit history while staying in line with the fair credit reporting act. Obtaining signatures from the applicant legally bind them into an authentic agreement eliminating the possibility of being accused of any fraudulent activity for the requester.

    Scroll to Top