1 min read Credit Dictionary

Permissible Purpose



Last Verified: March 22, 2023

Permissible purpose is defined in the Fair Credit Reporting Act for those who request a consumer credit report.  A company who wishes to view a credit report must have what is known as “permissible purpose”.  This means, the company must have a clear and actionable reason to request a report.  Permissible purposes are:

  • A court order or grand jury subpoena.
  • Written instructions by the consumer (consent to obtain credit report).
  • Credit grantors using the report for decisioning credit applications, reviewing an existing account or collecting an existing account. Employers who have received written consent may use a credit report to aid in hiring and promotion decisions.
  •  Underwriting of consumer insurance applications.
  • For a genuine business need, relating to a business deal initiated by the consumer. For account review to ensure the consumer is meeting agreed upon terms of account.
  • For reviewing an existing account to ensure the consumer is meeting agreed upon terms.
  • As required by law to establish eligibility for particular licences or other benefits, granted by the government. 
  • Investors, servicers or insurers may obtain a report to determine risk factors of a current commitment, before making the decision to invest, service or insure (such as real estate or second mortgages).
  • State and local officials may use a consumer credit report in assessing, changing or enforcing child support payments.
  • Credit grantors and insurance companies may use a credit report for offering pre-screened or pre-approved offers, provided the companies certifies the report will not be used for any other purpose.