FCRA Section 604 Explained

Added: 2026-05-19

[00:00:01]Let's play a game of truth and a lie.

[00:00:04]The credit reporting agency needs to have permissible purpose in order to place anything on your credit report.

[00:00:12]Truth or lie?

[00:00:14]And the answer is, Alex, for 500, that is a lie.

[00:00:19]And let me tell you why.

[00:00:21]Section 604 of the Fair Credit Reporting Act, aka 1681 B, permissible purpose, that particular statute is talking about who has the right to access your actual credit file. It has nothing to do with the agencies or the lender or the furnisher having the permission to report items of information to your credit report.

[00:00:46]So, when you hear the word permissible, I want you to think about permission.

[00:00:52]And the reason why you want to think about permission when you hear permissible is because the root word in permissible is going to be permission.

[00:01:00]Meaning that the other party has to have permission, legal permission, in order to access your actual credit file.

[00:01:09]When you hear purpose in permissible purpose, all that is saying is that the other person has to have a legal right or a legal reason for why they are actually accessing the actual credit file. It has nothing to do with items of information being reported to the credit reporting agency. So, again, the next time you hear somebody on social media or some big-time guru or some fast talker saying, "Oh, you can use this code right here, 1681, to be able to remove any and everything off your report," I want you to go and learn how to fact-check.

[00:01:43]Now, what I will tell you is this right here. When they say go and use law code 1681 to remove everything off of your report, and then they try to turn around and tie in with permissible purpose, they're using two different statues in the wrong way. They're mixing statues, and let me show you why.

[00:02:03]1681 of the FCRA, aka the Fair Credit Reporting Act, is going to be the section that governs congressional findings and purpose. And when you look at that section, it's strictly talking about fairness, accuracy, relevance, privacy, and protecting consumers from the misuse of their actual data. It has nothing to do with permission.

[00:02:25]1681 is going to be the foundation that leads the way to the other statues. So, with that being said, in the future, if you hear someone tells you or someone say to you that you are able to use 1681 permissible purpose to get any and everything off of your report, I want you to look at them like this right here. I want you to get them sideways.

[00:02:47]I'm sorry, Sway. Are you cool?

[00:02:49]Permissible purpose has nothing to do with removing items of information off of your report. It's all about access and who has that legal right to access the actual report. With that being said, let's go.