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Why Are You Pulling My Credit?

FCRA for EmploymentFair Credit Reporting Act (FCRA):  A Basic Summary & Review

The Fair Credit Reporting Act (”FCRA”) is a federal law, (15 USC § 1682) that was created, in part, to help insure that consumers have the ability to monitor, verify and correct what is being reported about them regarding their credit and other information. Unfortunately, the law is neither simple, easy to understand nor easy to implement.  Let us help you. 

The Fair Credit Reporting Act Deals with just credit, right? No. The Fair Credit Reporting Act deals with much more than just credit.  Today, information is available on just about everything you do.  Creditors reporting to the bureaus whether or not you pay your credit cards on time is nothing new. What is new, however, might surprise you.  The list below is but a small subset of the information that is collected and shared with those that pull your consumer liability reports: 

·       Mortgage payment history


·      Employment history

·       Rent payment history


·      Places you have lived & worked

·       Arrest history


·      Education

·       Traffic tickets


·      Phone numbers

·       Fines & other penalties


·      Public records

·       Accident history


·      Bankruptcy, liens, judgments

·       Relatives


·      Aliases


As you can see, credit card payments are just the beginning of the information that is collected about you, the consumer, when you are applying for credit.  What else is your consumer liability report (i.e., credit report) used for?

Uses of Consumer Liability Reports

The most frequent use of consumer liability reports is quite obviously when you are applying for credit.  Buying a car or home, starting a new business or just trying to get or increase a credit line, a creditor will require that your credit be pulled and reviewed to determine is you are a good credit candidate.  Some less commonly known uses of credit reports include evaluating a candidate for insurance, deciding whether a landlord wants to rent to a tenant and, perhaps most important, whether an employer wants to give you, the potential employee, a job. 

In recent years, in fact, getting a job is the area where credit reports have had the most increased use and potentially the largest impact.  Employers, both large and small, will almost always now do an employee background check before making a hiring decision.  What does this mean?  That in essence the employer will be pulling your credit report.  When an employer, however, does pull your credit and uses it in making an employment decision, strict guidelines must be followed. 

The Parties Involved

Equifax. Experian. TransUnion. Sure, most Americans know have heard about the Big Three.  These three multi-billion dollar, private, for profit companies, make a lot of money collecting and then selling information about you.  What you likely didn’t know, is that there are dozens if not a hundred smaller, more specialized credit and consumer reporting agencies.  These smaller agencies many times will specialize or focus a particular use.  Below is a list of such agencies and the areas they focus on: 

  • MIB, Inc. (medical conditions for life or health insurance)
  • LexisNexis (alternative data solutions)
  • Innovis (supplementary reports)
  • CoreLogic Credco (mortgage obligations)
  • Certegy Check Services, Inc. (check clearance)
  • TeleCheck (check clearance)
  • Clarity Services (payday lending)
  • DataX (payday lending)
  • Factor Trust (payday lending)
  • Microbilt (payday lending)
  • ISO (insurance claims)
  • Contemporary Information Corp. (rental background checks)
  • Hire Right (employment screening)

In short, credit has never been more important, especially since it impacts two things that impact almost all consumers’ lives:  the ability to find a job and the amount of money you must repay on debt.  If you have been turned down for a job as the result of something in your consumer or credit report and haven't received an "adverse action" from the prospective employer (i.e., the reason or explanation why you were turned down and advising you of your rights under the FCRA), you have rights and may be able to recover damages. If you have questions about your credit report, feel free to contact the attorneys at LeavenLaw to schedule a free consultation and go over your credit report today.