Credit Report Nuts and Bolts, Part 6 of 6: Who can see your credit report?

Creditors – can look at your report whenever you apply for credit, such as a mortgage, car loan, or credit cards.

Employers – can look at your report, but only under certain circumstances and only if you give them written authorization. Employers are allowed to look at your report to evaluate you for hiring, promotions, and other employment purposes – but I understand that it is done only with your permission in most states. A few states, such as Washington and Hawaii, have banned employers from using credit reports unless a good credit record is related to a job’s qualifications. (I will try to blog on this Washington state law in a later post)

Government agencies – some can look, but only if searching for hidden income or assets – usually only certain agencies can do this such as those trying to collect child support.

Insurance companies – home and auto insurers now use specialized credit scores to decide whether to issue you a policy and how much to charge for it.

Landlords – when deciding whether to rent you an apartment or home.

Utility companies – when deciding how much of a utility deposit (if any) to seek – but not in deciding whether to extend utility services.

Student loans – Usually, I am told by the NCLC’s Guide to Surviving Debt, that a credit score is irrelevant to obtaining government student loans, but it could be a factor in obtaining private (not government guaranteed) student loans. There may be an exception though, for Parent PLUS loans wherein parents–or professional students such as dental, law school, and medical school students–are seeking student loans in order to finance a child’s education.

Divorce, child custody, immigration, citizenship applications, registering to vote and other legal proceedings – your credit report should not be used against you, subject to a few limitations and circumstances.

Credit Report Nuts and Bolts, Part 5 of 6: Credit repair scams and overreacting to threats about damaging your credit rating

The National Consumer Law Center warns heartily against “credit repair” scams.

The NCLC debunks the “credit repair” claims:

– “We can erase bad credit” – The truth is that no one can erase bad credit information from your report if it is truthful and accurate.

– “Only we can remove old or inaccurate information” – this is untrue because you can correct any old or inaccurate information yourself. There is no reason to pay a huckster to do it for you.

-“We will erase even accurate poor credit history information, even if it is accurate” – Lying to a credit report agency is illegal.

If you have been hoodwinked into a “credit repair” scam, here is a few things you should know.

First, you may have some protections. Federal laws and some state laws require credit repair companies to provide mandatory disclosures before you sign up.

Second, the credit repair company is not allowed to provide any services to you until three days after you sign a written and dated contract.

Third, the credit repair scam is not allowed to charge you in advance under certain laws.

Fourth, you have a right to cancel the credit repair scam contract without giving any reason (do it in writing!) within three days of signing the written contract.

A collection agency pressuring you to pay under threat of making a negative credit report entry is a hollow threat. Under arrangements that the collection agency likely has with the credit reporting agency (or agencies) they are required to make a report every month anyway. So do not give away your last dollar to a threatening collection agency in order to “save” your credit report from “damage”. The negative credit history is likely to be reported to the credit reporting company anyway under the reciprocity requirements between the credit report company and the collection agency.