Simply put, permissible purpose is a valid reason to obtain a consumer report. Permissible purpose protects consumer privacy and is a requirement of the Fair Credit Reporting Act (FCRA) Section 604.
There are many types of permissible purpose.
Landlords have valid permissible purpose to run a background check on a potential renter.
Credit lenders have permissible purpose to obtain consumer credit on a car loan application.
Employers have permissible purpose to run a background check on potential new employees.
Section 604(f) of the FCRA requires a consumer reporting agency (CRA) to certify their users have permissible purpose to obtain a report and that the report won't be used for any other purpose.
Users need signed authorization from the consumer to obtain a consumer report.
Applicant signatures must be kept by the user in case of dispute or audit. Records retention laws vary by state so check with your state government regarding specific requirements.
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