A credit check is used to determine someone’s creditworthiness. A credit check can be as simple as getting an applicant’s FICO score or credit rating number or as complex as pulling a merged report of all three credit reporting agencies—Experian, TransUnion and Equifax. Knowing what information is needed for a credit check will help you be prepared if you are meeting with a lender or business.
Release of Information
In order for someone to do a complete credit check on you, they will need your permission. Most banks and businesses have clients or potential clients sign release of information forms. If the credit check is part of a pre-approval process to screen someone for a pre-qualified credit offer, businesses may run a partial credit check without your permission. Every time an individual or business runs a credit check on you, it is called an inquiry. Most pre-screened credit checks do not count against your credit score. Multiple checks from credit card companies or lenders can lower your score.
Social Security Number
One important thing needed for a credit check is to have a valid Social Security Number. This is needed to access your credit report. Information contained on the report may include your complete credit history, previous addresses, past employers and relatives. Businesses can query the three credit reporting agencies to retrieve all of your personal information. But without a Social Security Number, a credit check may only display impartial or inaccurate information.
Having the correct address will assure that a credit check pulls up the right information. While the credit report will display current and previous addresses, the information could be inaccurate or outdated. This check allows the person running the credit check to cross-check and verify information. If the information is wrong, a request must be made to the credit reporting agency. A small form will need to be filled out detailing the address changes.
Giving the businesses running the credit check accurate employment information will also prove beneficial. This will allow them to take a look into your employment history to see how long you were at each job. It will also give them the business names of your past employers so they can call to do a reference check.
Reasons for Credit Checks
There are several reasons why a credit check would have to be conducted. The main reason is when an applicant applies for a credit card. The credit card company will obtain information from the applicant through his application and conduct a credit check. Utility and cellular phone companies will also run a credit check to determine creditworthiness. If the applicant has a low credit rating or previous delinquencies, judgments or late payments, a business has the right to request a security deposit or deny service. Mortgages and car loans also require a credit check before lending to someone.
- Myfico.com: Why Is Your FICO Score So Important to Your Financial Health?
- Privacyrights.org: Credit Report Privacy
- Report to Congress. "Under Section 318 and 319 of the Fair and Accurate Credit Transaction Act of 2003." Accessed October 8, 2020.
- Consumer Financial Protection Bureau. "Common Errors People Find on Their Credit Report - and How to Get Them Fixed." Accessed October 8, 2020.
Julie Boehlke is a seasoned copywriter and content creator based in the Great Lakes state. She is a member of the Society of Professional Journalists. Boehlke has more than 10 years of professional writing experience on topics such as health and wellness, green living, gardening, genealogy, finances, relationships, world travel, golf, outdoors and interior decorating. She has also worked in geriatrics and hospice care.