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Who Can Pull Credit Reports?

Who Can Pull Credit Reports? Posted on March 27, 2018Leave a comment

Credit card companies always use a credit report to determine creditworthiness. Not only do they go off of what a FICO score is—they also skim the report.

Mortgage Companies

Mortgage companies are either banks themselves or work closely with a group of banks to determine whom to lend funds to. When a borrower approaches a bank wanting to obtain a loan for a new home or to refinance an existing one, the first thing it does is pull a credit report. The credit report often includes a FICO score, which determines the person’s creditworthiness. A FICO score is between 500 and 850 points with 850 being perfect credit. Depending on the loan type, most mortgages are generally unsecured—meaning there is a minimal down payment or equity when the lender writes up the loan. The only way a lender can feel secure in lending the money is by giving it only to someone who has a high rating—often in the high 700s and up.

Employers

Employers are becoming more likely to pull a credit report than ever before. The reasoning for this is they want to hire someone who has a proven track record of paying bills on time and showing a sense of financial stability. Most employers believe this trait of responsibility will follow through into the person’s professional life as well. For those who work in financing or security, credit reports are a must. An employer can also cross-check a resume with a credit report. Via the report the human resources representative can tell if the potential employee has been honest about whom their previous employers were and their previous addresses.

Insurance Companies

Obtaining insurance on a home, boat, car or business can be more challenging for those with a bad credit history. Most insurance companies will base their rates on what a person’s credit score is. The lower a person’s credit or FICO score, the worse rate she may receive, even if she has had no prior claims. One of the first things companies do when someone calls in for a quote is to gather information such as a Social Security Number from an online application, over the phone or in person. Insurance companies do not always inform a potential customer that they are running a report; this can be troublesome, because every inquiry made on a report lowers a person’s score.

Credit Card Companies

Credit card companies always use a credit report to determine creditworthiness. Not only do they go off of what a FICO score is—they also skim the report. They can deny credit if a borrower shows a large amount of revolving credit, new accounts, high balances or only a short period of time of having credit. Most credit card companies base their decisions off of the report alone and do not require additional information to make an initial credit determination.

Utility Companies

Those who are looking to open a new utility account need to have good credit. This means no late payments, no outstanding debt and a solid residence history. If the consumer has a low score, he may be required to pay a security deposit before services such as gas, electric and water may be turned on. Some utility companies also report any late utility payments or unpaid balance to the major credit bureaus, so making sure bills are paid on time each month is essential in maintaining good credit.

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