Who Can Check My Credit?

Under federal law anyone or any business can check your credit score but only for a legitimate business purpose. Generally, you do not have to give your consent for someone to check your credit score. Credit scores are used to build a character profile and if you have a low credit score, companies may view you as a high risk customer. That could cause you to be denied services or have to pay above-average rates on loans and fees.

Credit

When you apply for new credit the lender checks your credit score. Your credit report details your payment history and current debt levels. When you make a payment more than 30 days after the due date, the creditor notifies the credit bureaus and the late payment lowers your credit score. A loan default or bankruptcy filing can remain on your credit file from seven to 10 years. Lenders are reluctant to lend to people with a history of making late payments and defaulting on loans. Some state laws require lenders to ask your permission before pulling your credit. But if you refuse your consent, you cannot qualify for a loan since the credit check forms an important part of the application process.

Businesses

Insurance companies deal with risk on a daily business. Unsurprisingly, insurance companies check your credit report to determine how much of a risk you are to insure. If you have poor credit, the insurer assumes you are more likely to default on insurance premiums and therefore the insurer may charge you a higher rate.

Prospective landlords also check your credit because landlords do not like to rent to people who have a history of not paying their bills. Other companies including phone providers and cable TV companies also check credit before providing services to new clients.

Employers And Government Agencies

When you apply for a job the prospective employer may order a credit report but only with your written consent. Companies in the financial services industry are particularly wary of hiring people with money problems. These firms almost always check applicants' credit reports.

Government agencies can check your credit report but only to affirm your identity. If you apply for some kind of government licensing the agency handling your request normally check's your credit report. State child support agencies also monitor credit reports when attempting to arrange child support payments.

Checking Your Score

Federal laws entitle you to a free annual credit report from each of the credit bureaus: Equifax, Experian and TransUnion. You must pay a small fee, though, to receive your actual credit score. Some companies monitor your credit report on your behalf to try to detect and prevent fraudulent activity. These firms must have your prior consent and normally check your credit report once a month in exchange for a service fee.