Who Is Legally Authorized To Check Your Credit?

Who Wants to Know Your Credit Score?

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Checking your credit score is something you probably need to do more often, especially since many others may be checking on both your credit score and your overall credit report on a regular basis. Why are they doing that? Because your credit report and corresponding credit score are a lot like a financial report card — yours. All things being equal, banks, lending institutions and other public and private entities need a standard way to measure how much credit you should get — how much credit they can trust you to pay back in full and on time. Your credit report and credit score act as the measuring sticks by which your overall credit worthiness is determined. And it's the same for you; if you want to have a clear idea of how much credit you'll be able to get, making regular checks of your credit report and score are important.

Many Companies Check Your Credit Score

From your home mortgage to your electric and heating bills to the car you drive, your credit score and credit report are constantly being evaluated. Just as it's your legal right to check your credit report and score anytime you want, the same holds true for all of the following businesses and other entities:

  1. Lenders. The main reason lenders are in business is to loan money. And the way they stay in business and ultimately turn a profit is to lend money to those people who can back the loans. That's why they need to check your credit score and overall credit history before they agree to lend you money. Without knowing your credit score and the range that score falls under, lenders don't know much about you. In today's world, your word just isn't good enough.

  2. Credit card companies. Card companies will buy lists of individuals from the three major credit monitoring bureaus in hopes of signing up new customers. That's why you may tend to get a large number of offers for pre-approved credit cards. It's also important to note that your overall credit score and credit rating can be affected every time you get a new credit card. When you get that new card, you automatically get a credit inquiry. And these are the types of credit inquiries that can affect your score.

  3. Home insurers. For most of us, buying a home is the biggest single expenditure we'll ever make, and it's an investment we must protect. Home insurers know that too, and they check your credit report and score before they'll even consider insuring you.

  4. Auto insurers. It's a big day when you get a new car — the thrill, the excitement and that "new car" smell. That's the fun part. The more mundane aspects of getting a new car are between you and auto insurers. The open road is great; auto accidents and red tape aren't. An auto insurer, like any other insurance company, needs to know you're worth the risk.

  5. Utility companies. Everyone has probably heard at least one nightmarish story about someone's heat and hot water being shut off. That happens because people can't or just don't pay their utility bills. The flip side to that is that utility companies — both public and private — have shareholders and investors to answer to.

  6. Employers. Just like creditors, employers want to know who you are in terms of your financial track record. In fact, creditors and employers are often in cahoots when it comes to your ability to borrow money. Most creditors feel better lending money to those who show a consistent employment record.

  7. Landlords. Like any legitimate creditor, a landlord needs more than just a handshake to approve your rental application. Before you move in and start paying rent, they want to see that you have a solid on-time payment history.

  8. Government agencies. Certain government agencies may have licensing issues that legally allow them to access your credit report at any time1 without violating The Fair Credit Reporting Act (FCRA).

Clearly, it pays to make periodic checks of your credit report. After all, the law says that all of above entities can check your credit report and score anytime for any of the following reasons:

  • To grant credit
  • To collect a debt
  • To underwrite insurance
  • To offer employment
  • To honor licensing issues by some government agencies
  • To research and confirm legitimate business transactions

Since there are organizations out there checking your credit report and score regularly, shouldn't you do the same?

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