How to Check a Customer's Credit

If you're going to check a customers credit, you must have a legitimate reason for doing so. A lender such as a bank or other financial institution can check a customers credit; collection agencies and debt collectors can also check someones credit report. When you get ready to check an individual's credit, there are a number of steps you'll need to take. You can access a customer's report through one of the three credit reporting agencies (TransUnion, Experian and Equifax).

Instructions

1

Determine the reason why you'll need the credit report. Many lenders will access a credit report to see how a customer has paid their debts in the past before making a decision to extend credit. You want to make sure a customer doesn't represent too much of a risk. The amount of debt a borrower has is another thing you should be looking at.

2

Take a credit application from your customer. A credit report is accessed when someone applies for credit. You will need to get all of the customers information on this application. Usually the customer will need to sign the application, which gives you permission to access his credit report. The information needed will be name, address, Social Security number and date of birth. The application will also list the customers place of employment, personal references and banking account information.

3

Decide which credit report you'll access. Lenders usually use one of the three major credit-reporting agencies; sometimes they'll use more than one if they can't find a credit history for a customer and the customer is adamant about having an established credit history.

Many times credit reports can be retrieved right on the Internet through your credit terminal. All you have to do is key in the requested information from the appropriate credit-reporting agency, and the information will be displayed right on your terminal. You'll be able to see the customers entire credit history. All three credit reporting agencies won't have the same information.

4

Make a decision. It's now time for you to make a credit decision based on the information contained in the credit report, in conjunction with all the other information on the application. You'll either deny or approve the loan request.

You could also contact the customer if additional information is needed or if you need further clarification. If there is derogatory information on a credit report, you may want to ask the customer to explain what happened. If the problem has been corrected and the debtor is paying on time after the incident occurred, they could be approved for the loan request. You could also use automated credit processingthe loan will instantly be approved or denied if the customer does not meet certain criteria such as an adequate credit score.