Types of Companies That Are Looking at Your Credit Report
Credit card companies
A credit card company can look at your credit report when you apply for a card. However, if you’re a customer, that company can look at your credit report anytime, according to the Consumer Financial Protection Bureau.
The Fair Credit Reporting Act also allows credit reporting companies to release your credit report in association with “offering insurance coverage or setting insurance premium charges,” says the Consumer Financial Protection Bureau.
Additionally, prospective insurers can access parts of your credit file to prescreen you for insurance offers. Again, federal law allows insurers to do this but also gives you the ability to opt out of prescreening.
As part of a background check, employers can request a copy of your credit report. The Fair Credit Reporting Act allows credit reporting companies to release your report for employment purposes.
However, the employer must get your written permission to pull your credit report beforehand. You can refuse, but that could be grounds for the employer to reject your application, according to the Federal Trade Commission.
4. Telecommunications companies
When you sign up for phone, TV or internet service, the service provider might check your credit.
It’s not exactly a loan, but some companies want to make sure you’re likely to pay your bill, says James Garvey, the CEO of credit-building site Self Lender.
“The telecom provider wants to check if the customer owes money to the provider itself or to another telecom provider,” Garvey tells Money Talks News.
5. Public utilities
Signing up for water, gas or electricity? You might need to submit to a credit check, says Logan Allec, a CPA and the founder of financial education website Money Done Right.
“Utility bills are generally paid in arrears, meaning you’re billed for usage after the fact,” Allec tells Money Talks News. “In a sense, these companies are making you a short-term loan. They let you use $50 of water last month, and you have until a certain date to pay them for it.”
If you have a low credit score, Allec points out, the utility might not have confidence in your ability to pay bills on time and might charge you an upfront deposit.
6. Government agencies and courts
“You may think that the government should have no business requesting your credit,” says Allec, “but sometimes they actually have a good reason to.”
Allec points out that when you apply for government assistance, you might be subject to a credit check to see if you truly qualify.
Additionally, the Fair Credit Reporting Act permits credit reporting companies to release your credit report:
- In response to court orders
- In response to subpoenas
- For certain child support awards and enforcement purposes
Looking for new digs? Your landlord-to-be might want a peek at your credit report, says Leslie Tayne, a New York City-based lawyer specializing in consumer finance and debt.
Assisted living facilities and nursing homes
Expect to be subject to a credit check when applying to live in an assisted living facility or nursing home.