Understanding Credit Reports vs. Investigative Consumer Reports

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Understanding Credit Reports vs. Investigative Consumer Reports

Credit Reports vs. Investigative Consumer Reports: An Overview

Investigative consumer reports are significantly less well-known than consumer credit reports, owing to the fact that you are far more likely to have your credit report pulled than to have a full-fledged investigative consumer report produced on you. There are some significant parallels between these two kinds of reports; both involve an appraisal of your particular risk profile, are performed by employers or financial institutions, and are governed by the Fair Credit Reporting Act, or FCRA. However, there are significant distinctions.

Investigative Consumer Reports

Consider a thorough background check along with an investigative consumer report. These reports get more personal: they may involve interviews with coworkers or neighbors about your character and reputation, your lifestyle and honesty are questioned, and your ties with friends, family, and your community are all analyzed, among other things.

Key Takeaways

  • When you want to borrow money, lenders often check your credit record.
  • Investigative consumer reports, which need the individual’s consent, are often more extensive than credit reports.
  • Investigative consumer reports are often used to judge an individual’s character for licensure, tenancy, or employment, rather than analyzing creditworthiness.

Consumer investigations are not utilized to assess your creditworthiness. In reality, credit report information cannot be included in an investigative report. The FCRA differentiates personal character reports from credit reports, and a lender may not obtain an investigation report as part of the credit-granting process.

When an investigation report is obtained about you, a notice is issued by mail asking for your approval. No inquiry may be done without your permission, according to federal law. Failure to accept the investigation, on the other hand, would very certainly result in immediate refusal for whatever you were seeking for, such as tenancy, licensure, or employment.

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Consumer Credit Report

Lenders and credit reporting organizations build credit reports on you practically automatically. Credit bureaus store information on your debt levels, payback history, and presumed creditworthiness, particularly with the three big ones: Experian, Equifax, and TransUnion.

Because your credit score functions as a quantifiable summary of portions of your credit report, the information included in these files must be correct. According to federal law, you are entitled to a free copy of each of your credit reports once every year. There is a summary of your personal credit history there.

The FCRA requires organizations to demonstrate that they have a valid business interest in your credit history before they may retrieve your report. Applications for rents, insurance, or credit; employment choices; court orders; periodic checks by your financial institutions; professional license decisions; child support judgments; and law enforcement or counter-terrorism investigations are all permissible uses of your credit report.

The Bottom Line

Credit reports are obtained by almost everyone you try to borrow money from, including landlords, employers, and other organizations. Investigative consumer reports are pulled less frequently by fewer kinds of businesses and for a broader range of information. Your credit record is considerably more likely to be scrutinized than an investigative consumer report. If you are concerned about information being extracted, contact the Federal Trade Commission (FTC) to learn more about your FCRA rights.

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