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How Future Employers And Insurance Officers Use Consumer Reports

By Faye Mergel
Published: Tuesday, May 25th, 2010

GDSH-00024999-001In an attempt to prevent sensitive informationf rom leaking out, the Fair Credit Reporting Act states that only lenders are authorized to view the credit report of people legitimately. When people apply for a loan, the lenders are thus given the right to assess the applicants by looking at their credit reports. This is done because it is compulsory to view their payment history first before awarding them a loan.

However, employers and insurance companies are also being able to assess people without looking at their credit reports. Consumer reports that are supplied by credit reporting agencies are being substituted for the legal documents about a person’s financial background. While this is acceptable and the predominant practice of business owners, there are certain clauses with regards the use of consumer reports for assessing people.

Many consumers are puzzled how future employers and insurance agents are able to assess their creditworthiness and give them a corresponding premium if both institutions were not able to get hold of their credit reports. In fact, they can do it by interviewing people in your neighborhood, your relatives, past employers, or by hiring a credit reporting agency to investigate about your financial background.

Consumers are entitled to a couple of safety nets with regards the use of consumer repors. Employers using consumer reports must first inform the people in writing that their consumer reports will be viewed. And also, as mandated by law, the employer must also inform the person if the information contained in his consumer report was used against him and thus discouraged the employer from hiring them. This is not necessarily because of a negative entry in the report. Even people with excellent credit and payments histories get denied because of various reasons. This is because of the subjective preference of the employers.

Once the employer or insurance agent informed the consumer about the decision, the applicants can thus counter check the information with his own credit report. The employer or insurance company must point out which credit reporting agency supplied the informationa nd where the information was lifted. This is done in order to ensure that the information that caused disqualification form employment is really in the consumer’s credit report.

Consumer reports are simply guides that will help an employer gain more insight about his future employees. But consumer reports are not usually 100% accurate. It is still compulsory for people to counter check the information in the consumer reports with their own credit reports. And it is also within their right to demand fixing the consumer report if it has wrong information filed under your name. So be vigilant about the way your credit information are being used.

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