Who Can Check Your Credit?
- Companies and organizations cannot pull your credit report without your permission.
- Employers, insurance companies, creditors and others may pull your credit report before and while you work with them.
- Government agencies may also check your credit in some circumstances.
Your credit is an important part of your financial life. It can help shed light into how you manage your money and helps show creditors what kind of borrower you might be. Whether you’re in the market for a new job, want to apply for a loan or credit card, or hope to buy a car or house, your credit will often be considered.
If your credit score has taken a hit due to the coronavirus pandemic, you may wonder who can access your credit report, and how that will affect your chances of getting a loan, or even a job. Here is what you need to know about who can access your credit and what you can do to keep your credit score in optimal shape.
Organizations that may access your credit report
There are several third parties that have the legal right to look at your credit score or credit report, including:
Current creditors and lenders
If you have a loan or credit card, your creditor may check your credit periodically to determine whether to keep your terms the same or modify them. In the event your report shows new negative information, a creditor may boost your interest rate, reduce your credit limit, or even close your account. On the flipside, improved credit may help you to convince them to lower your interest rate or raise your credit limit.
Potential creditors and lenders
Potential creditors and lenders will check your credit if you apply for a new financial product like a loan or credit card. Your credit will help them decide whether to approve you, as well as what kind of interest rate and terms to offer you. Of course, the higher your credit score is, the better rates and terms you could expect.
Chances are high that a landlord will check your credit report if you apply to rent out a property. If they notice a history of delinquencies or evictions on your report, they may be hesitant to rent to you. They’re more likely to approve you if you have a solid track record of timely rent or mortgage payments.
Whether you invest in car insurance, life insurance, homeowners insurance, or another type of insurance, an insurance company may check your credit. Your credit could dictate whether they sell you a policy and the type of rate they offer you. If your credit report shows a history of late payments and collection accounts, you’re more likely to be offered a policy with higher rates.
Your credit report can even play a role in the hiring decisions of prospective employers. Believe it or not, high debt, delinquencies or a bankruptcy could prevent you from landing a certain type of job. For example, if you hope to work in finance, bankruptcy or an excessive debt load may be a negative in a potential employer’s eyes.
While it’s illegal to discriminate against you because you have gone through bankruptcy, it is legal to consider it during the hiring process. Keep in mind that employers will check a modified version of your credit report rather than your credit score. They’ll ask for your permission to look at your credit and can only do so if you grant it to them.
Some government agencies may pull your credit report to help determine whether you may be eligible for public assistance. It can also be used to calculate child support payment or approve your application for a government license.
How to keep your credit in good shape
Even if you’re dealing with financial hardship, there are several ways you can help your credit stay in the best shape possible so that whoever accesses your credit sees a solid record. Here are several suggestions.
Check your credit
You should know your credit score. All you need to do is visit AnnualCreditReport.com to obtain a copy of your credit reports from Experian, Equifax, and TransUnion. If you notice any errors or inaccuracies, be sure to dispute them as soon as possible. Due to the pandemic, you can check your credit for free on AnnualCreditReport.com every week until April 2021.
Contact your lenders
Under the CARES Act, there are two ways to protect your credit during the crisis. You must make on-time payments, or apply for coronavirus assistance programs. Call every lender you think you are not going to be able to pay and ask them for relief individually. They may reduce or defer your payments to help you out until you get back on your feet.
Be mindful of how much credit you use
Even if you’re out of work, do your best to avoid putting big balances on your credit cards, as this can easily drive down your credit score. Try to use no more than 30% of your available credit. So if you have a credit card with a balance of $3,000, do not put more than $900 on it at a time.
Consider debt relief
If you’re struggling with handling your credit, debt or just worried about falling behind on payments, it might be time to a bigger step. Freedom Debt Relief is here to help you understand your options for dealing with your debt, including our debt settlement program. Our Certified Debt Consultants can help you find a solution that will put you on the path to a better financial future.
Financial Advice to Ignore During a Recession (Freedom Debt Relief)
Financial Goals to Prioritize During COVID-19 (Freedom Debt Relief)
What You Should Know About Credit Discrimination (Freedom Debt Relief)
How to Protect Your Credit Score During the Coronavirus Pandemic (Consumer Reports)