Credit Reports & Background Information

Landlords, prospective employers and banks sometimes run credit reports and background checks on applicants to determine the level of risk involved in doing business together. Background information can provide clues about how well you manage money, whether you're a responsible driver and whether you have a criminal record. While negative marks on your credit report can hurt your chances of landing a job or preferred apartment, applicants have options to correct inaccurate information.

Credit Reports

Credit reports provide valuable insight into your financial history. Reports contain information about what types of credit you've accessed over the years and how much you're in debt. People viewing your credit report can see whether you have installment loans (such as student loans and home mortgages) or revolving credit, such as credit cards, department store cards and gas cards. Reports also state your debt-to-income ratio and payment history, including whether you have missed payments, late payments or accounts that have been turned over to collection agencies. Lenders like to see that consumers have long histories with credit agencies, signaling positive or mostly-positive interactions. Credit reports sometimes include information about your credit score, the three-digit number calculated to reflect your overall credit risk. High credit scores indicate positive factors such as low debt volume and on-time payment history. Low credit scores reflect high debt loads, spotty payment histories, bankruptcies or defaulted loans.

Background Information

Prospective employers, bank lenders or landlords want to run background checks to verify information you've supplied on loan or housing applications. Individuals may contact your previous employers to verify work dates, talk with personal references to learn more about your character or call banks to verify account numbers. More in-depth background checks might include a drug test or health assessment (for example, a trucking company might want to verify that your night vision is acceptable for overnight assignments). Jobs involving working with children or senior citizens might also include a criminal background check to assure the safety of those in your care.

Permission

Although lenders can access sensitive personal information about you, they can't move forward without your permission. Before bankers, landlords or employers can access credit reports or other background information, they'll need written permission from you. Otherwise, their actions violate your privacy. Additionally, personal information unearthed during credit checks or background checks can't be shared with people not directly involved in your selection process.

Negative Information

Whenever a landlord or potential employer denies your application due to negative information appearing on your credit report, he or she must provide you with a copy of the report and information about how to address or change that information if it's inaccurate. In some cases (for example, identity theft) your credit report may reflect purchases, missed payments, bankruptcies or credit card accounts that were fraudulently attached to your credit history because of criminal activity. For these instances, contact the credit bureaus involved and request the incorrect information to be removed.