Given its name, it is understandable why people assume that checks are only made when applying for credit, but this isn’t the case. Credit checks have become integral for confirming identities, addresses and employment status, but who can see your credit report?
The following is an overview of companies and organisations that can view your credit file and the circumstances a credit check will be carried out.
Banks
Banks access credit reports as a part of their identification vetting and will also use them when applying for credit facilities like an overdraft. A poor credit score does not mean a bank account will be denied, but it could mean credit facilities are limited.
Creditors and Lenders
In addition to banks, people may also apply for loans from other providers. As with banks, a credit search will carry you to your details and ascertain how you have previously managed credit. Those with low credit scores can still obtain a loan in some instances, but the interest rate will likely be higher.
Mortgage Providers
Although mortgage applications can be made via the bank, some third-party providers may provide better rates or offers. However, applicants will still need a reasonable credit score to ensure they can make the repayments.
Employers
Employers often run two types of credit searches. A soft credit search allows them to verify personal details and will not be recorded on a credit file. In contrast, a hard credit search assesses financial responsibility and will be recorded.
Employers carrying out a hard credit search must notify job applicants beforehand.
Utility Companies
Gas, water and electricity companies will carry out a credit check to verify your identity and ascertain you are not in arrears with other suppliers. If there is still a debt owed regarding utilities, then a prepay meter may be used instead.
Mobile Providers
Those wanting a phone contract will be subjected to a credit check, as mobile operators will provide the handset and service via credit. Although a lower credit score doesn’t mean refusal, fewer physical devices and tariff options could be available.
Government
Although Government checks are fewer than financial institutions, they occur. A credit check is carried out in specific cases, such as calculating child maintenance or assessing an application for a license.
When a credit check is used for identification purposes, this will not be recorded, so permission is not required. However, hard credit checks can adversely affect a credit file misused, and companies and lenders must always seek authorisation.
Companies must also ensure that documentation is authentic, which is commonly done using online document verification, ensuring only those permitted can view a credit score.
Checking Your Own Credit Report
The best way to ensure the details on your credit file are correct is by checking them yourself. There are three agencies to check, Experian, Equifax and TransUnion. You should obtain copies from all three agencies to see all details about you.
Should there be any discrepancies with your credit score, then you should contact the credit reference agency as soon as possible and the lender if possible. If there have been instances of fraud, then you must report this to the police.