Privacy preferences on creditworthiness data
Many US banks issue a privacy statement to their customers (for this question, assume a credit card customer) containing language like what's below, followed by a yes/no "Do we share?" and yes/no "Can you limit this sharing?" in a table. Examples include the Bank of America Consumer Privacy Notice or Chase Privacy Notice.
One of these areas is:
For our affiliates' everyday business purposes –
information about your creditworthiness
which is often followed by "Yes [we share]" and "Yes [you can limit this sharing]." Instructions for how to limit the sharing are provided below the table, usually by calling some number or going to a Web page to set preferences.
Does setting this privacy-protecting preference limit the bank from sharing information about your creditworthiness with their affiliates which are credit bureaus?
If not, why not? Why must the bank tell customers they can restrict the bank's sharing of their creditworthiness data, but then send the data to the credit bureaus anyway?
It seems to me that maintaining credit records/files on individuals is the primary everyday business of the credit bureaus, and that the credit bureaus are affiliated with the banks through formal business contracts. Are either of those perceptions wrong?
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See the first item in the list:
For our everyday business purposes – such as to process your
transactions, maintain your account(s), respond to court orders and
legal investigations, or report to credit bureaus
Note that there's no option for you to limit this sharing.
Credit reporting is the business need of the bank, not of the bureaus. They rely on them and others reporting it in their main business: lending.
While you can limit the sharing with other banks/insurance companies/service providers so that you won't get offers from them based on the data shared by the bank, you cannot limit the credit reports themselves.
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