Imagine getting turned down for a job or an apartment rental and having no idea why. You call up the lender or landlord, and they tell you the worst: you failed their credit background check. You’re dumbfounded. You’ve never missed a bill payment and as far as you know, your credit report should be squeaky clean. You immediately request a free copy of your credit report, only to find out there are all sorts of errors — including missed payments on debts you never borrowed and the names of collection agencies you’ve never heard of.
Unfortunately, this scenario isn’t so far-fetched. In 2012, a study from the Federal Trade Commission found that about one in five people had an error on at least one of their consumer credit reports. Sometimes the errors are minor and can be disputed easily. Other cases are much more complicated. In criminal cases of identity theft — if a person has been using your identity to get medical treatment on your tab, for example — you could find yourself facing legal charges on their behalf.
It’s practically impossible to prevent these types of mistakes from happening. To try to stay ahead of errors and potential fraud, it’s good to know how to run your own financial background check. And we’re not just talking about checking your credit reports. There are several important consumer reports that many people may not realize exist — from your medical history report and insurance records to your bank history and tenant records.
Banks, employers, landlords, insurance companies, lenders, utility companies, and other businesses purchase consumer reports to screen applicants. The information in your reports could impact their decision to offer you a loan, employment, or other type of contract. It’s also used to determine the terms of the arrangement, such as the interest rate on a loan or security deposit on a rental.
If you’re worried something on your consumer reports might blow your chances of qualifying for a job, a loan, or even housing, it is possible to check your credit and consumer reports before sending in an application. Catch them early enough and you have you a chance to dispute any mistakes.
Who Can Check Your Consumer Reports?
The Consumer Financial Protection Bureau maintains a list of several dozen consumer reporting agencies along with their contact information. You may recognize the three largest consumer reporting companies, Experian, Equifax, and TransUnion. But there are also specialty agencies that collect, organize, and sell specific types of information about you, such as your history of prescription drug purchases.
While you can always request a copy of your own reports, consumer reporting agencies can only send a copy to another individual or organization under certain circumstance. Your written permission or a court order, along with a valid reason for needing a copy of the report, could satisfy that requirement.
Generally, you’ll be able to request one free copy of each of your consumer reports at least once every 12 months. You also may be entitled to an additional free copy of a report if:
- The information within the report is used to make an adverse action against you, such as denying your application or raising your rate. To get a free report due to an adverse action, you must make the request within 60 days of receiving the notice.
- You place a fraud alert on your credit file after someone stole your identity.
- You’re unemployed and will look for work in the next 60 days.
- You’re on public assistance.
When you don’t qualify for a free report, by law consumer reporting companies can only charge a maximum $12 per report that you request.
While you may be able to request a free or inexpensive copy of your consumer reports from a variety of agencies, the process could be time consuming. Although it’ll cost more, it could be worth your time to pay for a background check that includes information from multiple sources.
To conduct a DIY financial background check on yourself, we’ve listed several types of consumer reports you can check and how to go about checking.
Keep in mind, you might not always have a report to review. For example, if you’ve never had a credit line or loan, you might not have a consumer credit report. Or, if you’ve never filed an insurance claim, you might not have one of the specialty insurance reports.
You also might not have a report if there isn’t any recent activity, as information generally drops off reports after seven years.
You can request a free copy of your credit report from a bureau once every 12 months on AnnualCreditReport.com. There are also companies that give you free access to your Experian, Equifax, or TransUnion reports throughout the year, as well as several paid options that give you access to your reports from all three bureaus.
Your credit reports contain several sections, including identifying information, a record of your payments on credit accounts, credit inquiries, and public records or collections information. Experian, Equifax, and TransUnion are the three largest nationwide credit bureaus, and your credit report from each bureau should be similar, but not necessarily the same.
Checking your credit reports is an important first step because the data on the reports could be used by lenders, landlords, utilities, insurance companies, and employers. Negative marks on your report could lead to you lose an apartment or job opportunity, or result in worse loan terms or higher insurance premiums. The information on your credit reports is also what determines your credit score, which is used for many similar purposes.
Credit reports contain positive information, such as on-time payments, as well as derogatory marks, including past bankruptcies, late payments, and liens. If you find incorrect information on one of your reports, you can file a dispute online or by mail.
Your credit report won’t necessarily come with a credit score, but there are free and paid ways to get a copy of one, or more, of your credit scores.
Check and Bank Account Reports
If you’re having trouble opening a bank account or getting a merchant to accept a check, look for errors or negative information in reports from the following companies.
ChexSystems keeps a database on consumers’ activity with checking and savings accounts. Many banks will pull your report and consider the information when reviewing your application for a new account. Unlike consumer credit reports, your ChexSystems report won’t have positive information. Instead, they only show negative marks, such bounced checks or unpaid fees.
You can request a free copy of your report online, by mail, or by fax, and file disputes online. ChexSystems also scores people based on a 100 to 899 scale based on the information within their report, and you can request a free copy of your score by mail or by fax.
There are also several companies that track consumers’ history with checks and help merchants and payment processors decide whether or not to accept someone’s check. You can request a free copy of your reports from Certegy Check Services, TeleCheck, and Early Warning Services.
Alternative Lending Reports
Some lenders don’t report your history of payments, or lack of payments, to the three nationwide credit bureaus. However, several smaller consumer credit reporting agencies, such as Clarity Services and FactorTrust, collect this “alternative” credit data. Often, the information comes from subprime or alternative lenders, such as payday lenders, rent-to-own retailers, subprime auto lenders, and check-cashing services.
MicroBilt, and its subsidiary PRBC, as well as CoreLogic Teletrack also compile credit reports using alternative lending data and use the information to create consumer credit scores. You can request a copy of your reports from CoreLogic and MicroBilt.
Insurance reports could show the types of insurance coverage you have, your claim history, and the resulting losses from a claim. Your report might have information on your driving record or your personal property insurance claims, and that data could impact your ability to get coverage and your premiums.
LexisNexis Risk Solutions offers two C.L.U.E. reports that you can order for free, one for personal property and a second for auto insurance. Insurance Information Exchange also collect information on people’s driving record. However, you can only request a free copy of your report after an adverse action has been taken against you due to information within the report.
Medical History Reports
Life, health, disability, long-term care, and other health-related insurance companies may use specialty medical reports to screen applicants.
Employment Screening Reports
Some companies pull job applicants’ credit reports, but others use more thorough background checks to screen applicants. The reports could have information about your criminal record, driving record, drug or alcohol test results, workers’ compensation claims, and volunteer activity. They could also be used to verify your education, professional accreditations, and previous salaries.
Employers aren’t allowed to pull your consumer credit report without your written permission. When a company requests a consumer report for employment-screening purposes, it won’t receive a credit score with the report.
The Work Number, Sterling Talent Solutions, Pre Employ, HireRight, GIS, and First Advantage all offer employment screening reports and services. You can request a free copy of your report, if it exists, from each company. Knowing what the hiring manager will or won’t see could give you extra time to prepare an explanation of the potentially negative information they find.
Tenant Screening Reports
With your permission, some landlords will look over a copy of your consumer credit report and check it for past late payments, bankruptcies, or other indications that you’ll have trouble paying rent.
Others use a more comprehensive tenant screening service and receive a report that could detail whether or not a person has a criminal record, is on a sex-offender or terrorist list, or has been evicted. Some tenant screening reports also have a record of the person’s rent payments and include a copy of one of their consumer credit reports.
There are a variety of other consumer reports you can request and review for errors. For example, the CoreLogic Credco consumer report contains information related to properties you own and could be used by mortgage lenders or brokers. (The same company’s Teletrack report is mentioned above as an alternative lending report.) LexisNexis collects and compiles information on individuals from a variety of proprietary sources and public records.
There’s also SageStream, whose consumer reports are used by mobile phone providers, utilities, and other lenders. The National Consumer Telecom and Utilities Exchange collects information and sells reports about consumers’ telecom and utility accounts and payment history. If you’ve ever had to show a photo identification to make a return at a store, The Retail Equation could add that data point to your profile, and if they suspect fraudulent activity, you might be blacklisted from making returns to some retailers in the future.