Hidden amid the fine print of many applications, lease agreements and other contracts is a case a that most people over look. This sentence usually involves giving the other party permission to perform a credit check, and when it is notified in an agreement most readers wonder "What is a credit check and why do they want one?"
Credit checks are simply confirmations of a person's credit payment history. There are many times where knowing a person's credit history is important, such as when you are considering renting an apartment to someone, or issuing a business loan. Would not you like to know how likely they were to pay you back?
Credit checks involve sensitive personal data. Therefore, many people are concerned about precisely who they've entrusted with their records. Fortunately, the Fair Credit Reporting Act has established unambiguous rules governing credit checks. Your credit data will be accessible to any business giving you a line of credit, to your creditors themselves, and to your insurers.
Your employer does not have the right to look at your credit history unless you give them specific written permission. Accessing someone's credit history, even that of an employee, is against the law. If you find that someone has looked at your credit history without permission, the law allows you to take them to court.
Many people are unaware that they can easily look into their own credit history, essentially carrying out credit checks on themselves. Under the Fair Credit Reporting Act, all Americans are entitled to request their own credit histories, free of charge, once a year from each of three different credit reporting companies, for a total of three free reports a year.
It can take up to fifteen for you to receive your credit history but once it arrives you will be able to see what kind of information is used to evaluate your financial status. One of the more important things in your credit history is your credit report scores. These are the numeric representation of you entire credit history. Many loan applications ask for you to provide a credit report with score in order to better quantify level of risk as an investment. By knowing this score ahead of time you can gain a leg up in loan applications.
After you learn what is in your credit history, you will understand why banks and other financial groups feel it is important to review your file before deciding to deal with you.
Source by Daniel Lesser