You may not be happy to hear this, but more companies, institutions, government agencies and people review your credit score and history file than you imagine.
While this is frightening, I don’t want you to worry. There are remedies and I’ll get to that shortly.
First, let’s review who can and can’t see your credit report.
Who Can See Your Credit Report?
As a starting point, it’s important for you to understand that Federal law gives businesses the right to check out your credit data before they agree to do business with you.
The law that grants this (and which regulates its implementation) is the Fair Credit Reporting Act – otherwise known as FCRA.
Of course this law gives companies the right to look at your credit information if you give them written instructions to do. But beyond that, many other groups can review your private credit data without your permission.
The list of people that fall under that include:
- Anyone who has a court order for such data
- A business that is at risk (now or potentially in the future) if you agreed or initiated the business relationship or are currently in a business relationship with them
- Potential employers (this requires your written permission)
- A governmental agency reviewing your application for a license or benefit from the government if such license or benefit could result in you having greater financial responsibility
- Utility companies and phone companies when you apply for service
- Insurance companies when you put in an application for coverage. Even if you are simply renewing your insurance, they can open up your credit file without as much as asking you
- When a credit offer is made (even if you didn’t ask for that offer)
The last point is especially problematic; if a credit card company just thinks about offering you a new card, they can inspect your credit score and report whether you like it or not.
And the list doesn’t stop there. If you try to get a loan from a bank or other organization, they’ll take a magnifying glass to your credit history as well. So will possible landlords.
Debt collectors can also check your credit report depending on state laws.
Do These Credit Inquiries Impact Your Score?
Some credit inquiries impact your credit score more than others. The rule of thumb is that each inquiry “costs” you five points so a few peaks don’t really amount to much.
But if several creditors and/or potential creditors are looking through your credit history, it can make a huge difference to say nothing of the invasion of your privacy.
And keep this in mind; the point penalty weighs down your credit score for a year. And the data remains on your file for 2 years.
In other words, if you have too many of these inquires, it cost you big time when you need a great credit score most – like when it comes time to take out a loan.
How to Protect Yourself Against Uninvited Credit Inquiries?
First, keep in mind that credit reviews are not benign; they can hurt your credit score and (more importantly) they expose your private information to people you probably don’t know.
The take-away is this; don’t be so fast to give companies permission to access your credit report.
One good way to do that in my opinion is to opt out of getting pre-approved credit card offers. The good news is once you get off of that list, companies that would otherwise have random access to your credit file no longer do.
Opting out of this list is easy to do; simply call 1-888-567-8688 (It’s a joint service created by the national credit reporting agencies) or access it online and answer a few questions.
It’s as easy as that. And while you are at it, I also suggest you ask your spouse, partner and adult children to go through this same process.
Check Your Credit Scores Periodically
One safeguard the law builds in for consumers is that all credit inquires show up on your credit report. That means it’s very easy for you to see who is looking at your private and personal credit information.
In order to get your credit report contact the credit bureaus and they will be happy to send you your report.
Once you get your credit report, I suggest you look it over very carefully. Then, if you see inquiries that don’t make sense you can take proper action.
Note: I suggest you request your free annual credit report from 1 credit bureau each 4 months. That way you can get a no-cost report every 4 months and it is easy and inexpensive to keep tabs on who is looking at your information.
What if Someone Illegally Accesses your Credit History?
If some bad actor crosses the credit line, you may sue for $1,000 or actual, provable damages and costs if they exceed that amount.
You can file your suit in federal or state court. This would be a good time to consult with a professional to make sure you pursue your remedies correctly and in a timely manner; there are statutes of limitations which mean you have to file your complaint within certain time frames or you will be out of luck.
Besides filing a law suit, you can file a dispute with the credit bureau but don’t stop there. In addition, file a complaint with the Federal Trade Commission and may be even the county bureaus of consumer protection.
Your credit report has your most personal financial information. Many businesses have legitimate rights to review your report.
But there are far too many people who have access to your information who should not. Get on the “opt out” list and review your credit report on a continual basis.
When you find intruders, take action. Privacy is a right – but you have to work a little in order to protect that right.