How Healthy Is Your Credit?

Get the Insight for Smart Decisions by Pulling Credit Reports

Pulling credit reports for potential tenants or employees online is a convenient way to get an overview of someone’s financial history before you make your decisions on whether or not to rent to them or hire them. Nowadays it seems like everyone is using credit reports to make smarter decisions about who they do business with. It may be expensive to pull credit reports but you could potentially avoid hiring the wrong person or getting stuck with a tenant who won’t pay.

Is Pulling Credit Reports for Somebody Else Legal?

In order to legally pull somebody else’s credit report you will need to get written permission from them. If you pull somebody else’s credit report, even if it’s just an accident, you can be responsible for damages caused by pulling the report.

In order to pull somebody else’s credit report you will need to collect their personal information including their legal name, address, social security number and any previous addresses they may have had recently. If you’re requesting a credit report for a potential employee you should let the credit bureaus know so they can provide you a report without the person’s date of birth which avoids the risk of age discrimination claims.

If you find something on the credit report which makes you decide against hiring someone or allowing them to rent from you, you are legally obligated to inform them of which credit report you pulled and what information made you decide against them. They can then choose to contest this information if they would like.

Who is Pulling Credit Reports the Most?

The businesses that pull credit reports the most include:

Mortgage Companies - If you plan on taking out a loan for a home you better bet the mortgage company is going to check your credit. They are generally most interested in your credit score to determine how much of a risk lending to you may be. The higher the risk, the higher your interest rates will be.
Employers - Employers use credit reports to verify past employers as well as determining how responsible a potential employee may be based on their credit history. If a person frequently makes late payments or defaults on accounts they will probably be seen as irresponsible and not worth hiring.
Insurance Companies - If you have a bad credit history getting insurance may be a challenge. Most insurance companies now actually base their rates on a person’s credit history. The lower your score, the worse your rate will typically be.
Credit Card Companies - Any time you apply for credit odds are your credit report will be checked. Although most lenders rely on the FICO credit score, credit card companies are also known to browse your full credit report as well before making a decision.
Utility / Phone Companies - Utility companies and phone companies are also now checking credit reports of potential customers. If you have a poor credit score you may be asked to provide a security deposit before getting service.

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