Who's Looking At Your Credit Score?  You Might Be Surprised

It's common knowledge that your credit score will affect your ability to get a loan.  Your credit score will also be evaluated when you apply for a credit card, an automobile loan, or other lines of credit.

Whenever you apply for credit, no matter what type -- whether it's for a car, a home, a credit card -- the lender will review your credit report.  The lender might decide to extend a loan to you, but the interest rate may be high if the lender views you as a credit risk. Even if you are applying for a secured credit card, the lender may evaluate your credit score in determining your eligibility.

Your Credit Score Goes Beyond Loan Approval

Even if you are not planning on getting a loan or credit card, it is a good idea to make sure that your credit score is as clean as possible because it can and will affect other areas of your life.

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What many people do not know, for example, is that if you are looking at a home or apartment to rent, the landlord might evaluate your credit report in determining whether you can lease the home or apartment.  Because the score theoretically reflects your ability to make monthly payments, the landlord might decline your rental application if he or she thinks that you will be unlikely to pay your rent.

Your credit score might also affect your ability to get a job.  This truly seems like a "damned if you do, damned if you don't type of situation when you are trying to earn money to take care of your credit issues.  Nowadays, many potential employers review your credit report to determine whether you can handle money responsibly.

Your ability to obtain insurance might also be affected by your credit report, depending on the policies of the underwriter.

Who Is Allowed to Look At Credit Reports?

In most cases, you must grant permission to landlords and businesses who want to review your report.  However, your current creditors can review your report periodically without asking for your consent.  Generally, businesses, lenders, government agencies and others can review your credit profile without asking you if their review is for "permissible purposes."

The Fair Credit Reporting Act (FCRA) defines the “permissible purposes” for which consumer credit reports can be provided to others. A credit report may be supplied if it will be used for:

• credit granting considerations;
• review or collection of an account;
• employment considerations;
• insurance underwriting;
• application for a government license;
• with your written permission;
• in response to a court order;
• or an FBI investigation pursuant to changes to the FCRA enacted in 1996 that allows the FBI to access consumer credit reports in connection with an investigation of issues such as counterintelligence.

Unless someone fits these categories, they should not be viewing your credit file. Anyone who knowingly and willfully obtains a credit report under false pretenses may be fined under title 18, United States Code, and imprisoned up to two years.

When you receive those "preapproved" credit card applications, chances are that the credit provider reviewed your credit report as part of a "permissible use" under the FCRA.  While credit scores can be negatively affected by numerous inquiries, these types of inquiries into your credit report will not reflect negatively on your score.

Most inquiries will stay on your report for up to two years.

"Who's Looking At Your Credit Score?  You Might Be Surprised" contributed by Urbain C. Beck