Legal Question in Business Law in California

Re: Credit Reports and Damages

Ordinarily you DO give your permission -- in many cases twice (once in the form you fill out to get the loan that's being reported and once when you fill out papers for the new lender / employer / landlord / etc. who wants to get the information. Theoretically, the info doesn't get around without your permission. You may not realize you've authorized such use, but if you review the papers you signed you'll probably find it there.

As far as the information being damaging, you can only prevail in a lawsuit if the information is false or is used without your permission. Giving out false credit information is a specific instance of the more general tort of defamation, which is also known as slander (when the false information is communicated orally) or libel (when it is in print). A statement about you isn't defamatory if it's true, so a credit report that accurately reflects late payments, collections, defaults and the like will withstand a court challenge.

If the information is circulated without your permission, you may have a claim for invasion of privacy. Depending on the circumstances, your case might be against the credit bureau, the recipient of the information, the entity that gave the information to the credit bureau, or some combination of the above. You don't need to prove actual damage to obtain an award in such a suit, but the recovery will be limited unless you can prove that you were harmed.

Most people who are upset about the impact of their credit report really have no one to blame but themselves for creating the credit history that the reports set forth. However, an inaccurate report (or an accurate report which is not kept confidential) can be the basis of a good lawsuit.