Get Off My Credit Report!
Credit Reports
Federal law requires the three credit bureaus, TransUnion, Experian, and Equifax, to provide you with a free annual credit report. We encourage you to pull your credit annual with each of the three credit agencies because the same information does not always appear on all three credit reports. We are here to help if there are items on your credit report that should not be there.
Accessing Your Credit Report
Credit reports will tell you why a party has pulled your credit. There is a section in credit reports for “Hard Inquiries” and “Soft Inquiries.” A Hard Inquiry usually involves inquiries from you applying for credit or financing or as a result of a collection. “Hard Inquiries” will usually stay on your credit reports for twenty-five months and they impact your credit score. A Soft Inquiry, by contrast, does not impact your credit score.
The Fair Credit Reporting Act
The first question to ask is whether the party pulling your credit has the right to look at your credit. The answer to this depends on your relationship with the party pulling the credit.
The Fair Credit Reporting Act provides that a party can only obtain a consumer credit report under certain circumstances “and no other.” Debt collectors may pull your credit only if it “intends to use the information in connection with a credit transaction involving the consumer (that’s you)” and involves “the extension of credit to, or review or collection of an account of, the consumer (you again).”
This federal law prohibits someone from pulling your credit unless there is a credit transaction. If you apply for a credit card, for example, the credit card company will ask you for permission to pull your credit. The credit card company also might pull your credit if you default because you have initiated the transaction (by asking for credit).
However, the Fair Credit Reporting Act (“FCRA”) prohibits an HOA or its lawyers from pulling your credit unless it first obtains a valid judgment. The Ninth Circuit Court of Appeals has held that it is a violation of the FCRA to pull an adverse party’s credit report for the purpose of determining whether the consumer had sufficient assets to pay a judgment before obtaining a judgment. Mone v. Dranow, 945 F.2d 306, 308 (9th Cir. 1991).
Your HOA’s lawyers cannot look at your credit for any reason, such as deciding whether you might be collectible until they obtain a judgment. As the Ninth Circuit has reaffirmed this holding several times over the last twenty-five years, we believe that a good argument can be made that a debt collector who obtains your credit before filing a lawsuit or before judgment has acted in willful violation of the FCRA. Only “a judgment creditor is authorized under the statute to obtain a credit report in connection with collection efforts.” Pintos v. Pacific Creditors Ass’n, 605 F.3d 665, 676 (9th Cir. 2010).
Contact an HOA Attorney
You may obtain actual damages, statutory damages, and punitive damages for willful violations of the FCRA. You are also entitled to recover attorneys’ fees and court costs under the law.
If you have been sued or have received a demand letter threatening a lawsuit, we recommend obtaining your free credit reports.
Our lawyers are standing by to assist you in interpreting your credit report and counseling you on any potential claims you may have. Get in touch today.