Why Do Companies Request Credit Reports? Essay

Bad credit reports can affect ones’ life in several negative ways. With a bad credit report and a low credit score, it is harder to receive a credit card, an automobile loan, a mortgage, or possibly a job. It is important that one is always aware of the credit decisions made. Paying bills late, maxing out credit cards, and filling out too many credit applications in a brief period will also have a negative impact on the credit report. To keep a good credit report, one should pay bills on time and apply for credit sparingly. Last, but certainly not least, one should check their credit report annually! A free credit report is available from each of the three credit reporting agencies each year. This is something one should take advantage of since it will help them judge whether they are managing their credit wisely. It is imperative that one keeps a good credit score. If not, one could miss out on many opportunities. For example, one may find an opening for their dream job that they are qualified for, but the negative credit report causes them to not get the job. Do not let this happen! Maintain a good credit report and opportunities like this will not pass by!

Personal History, Form 1624: Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions, and Form 1846: Statement Regarding Lobbying (U.S. Small Business Association, n.d.). Lenders and borrowers must work together in order to apply for the most applicable loan to the business. According to U.S. Small Business Association (n.d.), “Borrowers should provide complete financial statements for the last three years including balance sheets, income statements, and a reconciliation of net worth as well as a current (no more than 90 days old) interim financial statement” (Business Financial Statements). The borrower must also provide projections to the creditor. The projections predict a year out or the positive flow of cash, which includes earnings, expenses, and the reasons behind the projections (U.S. Small Business Association, n.d.). The borrow should include documentation to assist in the predications such as contracts of lease proposals, franchise agreements, purchase agreements, articles of incorporation, plans, specifications, copies of licenses, letters of reference, letters of intent, and contracts partnership agreement (U.S. Small Business Association, n.d.). If the borrower does not provide the proper

Making mistakes when it comes to your credit is a lesson that many people learn the hard way. Constant phone calls, mail, and threats can make a tough financial situation worse. Either how well or how poorly you manage your debts and finances are available to creditors to see when you apply for credit, such as for a retail store card, or even an auto or home

This information helps determine if the tenant is likely to pay their bills on time. Finding a job is an advantage to having a good credit record. Employers have the option to look at an applicant’s credit history to decide whether or not that person is reliable. If an employment agency is checking a credit report they usually check it for fraudulent activity. Other company’s check for derogatory information. If those types of things are found then the applicant may have some explaining to do. Not every job looks at credit history. However, some jobs do such as, accounting, finance, or a high ranking position in a company. A person with good credit history shows if this person is responsible and if that person is able to be trusted with their finances. On the other hand, there are certain drawbacks of having a credit record on file. Some offenses to a credit record are minor and others are major. Bankruptcy is a case where a consumer is unable to pay outstanding debts. According to Investopedia (2001), “Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy” (2001). After the proceedings the individual is given another chance to pay off the debt. Bankruptcy is on file for ten years. During this time, the person or business responsible may struggle with the loss of property. Moreover, other losses may persist that include, loss of income, poor credit score,

The Federal Fair Credit Reporting Act (“FCRA”) provides borrowers with consumer rights and protections including the right to dispute inaccurate or incomplete information with the consumer-reporting agency or with the furnisher (Residential Credit Solutions, Inc.) directly. This law requires RCS to review the dispute including supporting evidence provided with the dispute. The furnisher must investigate the disputed information and provide its findings to the consumer-reporting agency or to the borrower.

The U.S. Federal government passed the Fair Credit Report Act in the 1970s to protect and ensure transparency and privacy between all U.S. Citizens in the systems of consumer reporting agencies. In other words, no one could just put information on us in these databases that are misleading or false and therefore, are obligated by law to change it when falsehood is discovered.

4). He further backs up his answer by explaining that knowing every possible thing about applicants is crucial in protecting the interests of the company and the business owner (current employees, customers, partners, & financial interests).

We collect, hold, use and disclose personal information about you (including information required to comply with Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), the National Consumer Credit Protection Act 2009 (Cth) and the Personal Property Securities Act 2009 (Cth)) to: assess and process your application; provide you with, manage, audit, evaluate, improve and develop product or services; notify a credit reporting body or other credit providers of your payment history or any default by you; conduct credit scoring; model and test data; communicate with

Thornton is in violation of the FCRA polices, due to the inaccuracies in credit reports the FCRA requires that the credit check be disclosed to applicants and consent form used needs to be separate and only used to notify the applicant of the check. A statement on an application will not suffice. If Thornton decides not to hire an applicant based on their credit history he is required to send them pre-adverse action disclosure.

In this case Maria is considered as a disclosed principal and Maria’s receptionist is her agent. A disclosed principal is defined as a principal whose identity is known by a third party (Clarkson, 2015, p 644). FTC being the third party in this situation, recognizes Maria as a principal and recognized her receptionist as an extension of Maria’s authority. By referring credit documents and inquiries to her receptionist, Maria is granting her receptionist implied authority to process credit documents on her behalf (Clarkson, 2015, p. 643). Therefore, Maria will be held liable regardless of whether or not she was aware of her receptionist’s actions.

     Information gathered from various nationwide newspapers have indicated that some employees of companies that handle personal consumer information such as banks and utility companies, among others, have emailed confidential loan files to unauthorized third parties. This inappropriate employee use of email can result in identity persecution of the customer who have entrusted them with their personal data.

Mask discrimination is one of the factor. A credit rating company peeps into customer’s social media profile, job history and other public data to enable banks target credit card offers to clustered consumers. In 2008, company CompuCredit Corporation, a Visa and MasterCard marketing firm (now, Atlanticus Holdings Corporation) was penalized for not disclosing behavioral scoring model which churns some consumers resulting bias customer scoring. Uneven decision support is another major factor that affects customers financial standing. Credit card companies are using fraud analytics for detecting uneven transactions and flag those customers. But there are cases where the customer is genuine and has made some transactions unknowingly which may be flagged as fraud. Analytic system that approve loans for customers are also linked to these records results in denial of proposal for qualified customer. With high volumes of data analytics, security stays a big concern. Data security from cyber criminals or hackers. And from renowned organization or body. Edward Snowden’s revelations about the US National Security Agency spying on American citizens and European officials have shaken the world.

Knowing what other outlying debts customers have could be helpful in determining high-risk customers. Along with past credit history this could be helpful in determining customers to reject.

As technology improves, the wide use of “hard information”, such as the borrower’s credit history, reduces informational asymmetries. Therefore, long-distance small business lending is easier (Frame, Srinivasan, \& Woosley, 2001; Petersen \& Rajan, 2002). However, even with the use of credit score data, collecting ``soft information" still helps local lenders control risks to avoid delinquency (DeYoung, Glennon, \& Nigro, 2008) and provides informational advances in offering more favorable rates (Agarwal \& Hauswald, 2010).

There are certain pieces of information that an employer may not seek out concerning a potential job applicant or employee. An employer may not conduct a credit or background check of an employee or prospective employee unless the employer notifies the individual in writing and receives permission to do so.