Frequently Asked Questions: The Credit Report
January 3, 2008
Why are they so hard to read?
Credit reports contain hundreds of pieces of data, updated every month, from banks, credit card companies, auto lenders, mortgage companies, department stores, etc. The things that make it challenging to decipher are the same things that make it a valuable hiring tool. Each piece of data is a link to your applicant’s overall financial history, and the reports contain a tremendous amount of data. We provide our clients with an Experian credit report, which is considered to be the most accurate, and believe it or not, the easiest report of the three major credit bureaus to read.
Unfortunately, the credit bureau determines the visual appearance of the report and prohibits us from changing it. However, to make this process easier for our clients, we offer credit report tutorials on a daily basis and would be happy to schedule a time for you and your colleagues. Please contact our customer relations department at 1-800-235-3954, Option 2 to schedule a time. We also included several credit report guidebooks in the New Client Manual. We would be happy to send additional copies via e-mail to anyone who needs them.
Why can’t you just summarize the report for me in a few paragraphs?
The Fair Credit Reporting Act places clear barriers between those who provide the information and those who make decisions based on the information. As your conduit to Experian, we can provide their report to you and answer any questions you have, but we are not allowed to summarize “key elements” or make a recommendation based on the report’s contents. By selecting some information to summarize and omitting other information, we would be in essence, interpreting the report for you, which we are not legally permitted to do.
My applicant said he was granted bankruptcy but it did not show up. Why?
There is no mandate or law that forces any financial institution or courthouse to share information with the credit bureau. If the court clerk at the Bankruptcy Court did not tell the credit bureau that a bankruptcy was granted by the judge, it will not appear on the credit report. The only truly accurate way to find it is to run a Federal District Bankruptcy Court search.
My applicant was ordered to pay $2,000 to a creditor, but there is no record of payment. Does he still owe the money?
It is very common to see a judgment leveled against an applicant but no record of restitution being made. In many cases, a creditor is not going to go back to the courthouse and inform the court clerk that your applicant wrote him a check. And if he did, there is no guarantee the court clerk is going to tell the credit bureau. The person who is owed the money is most likely just going to cash the check and move on. The best possible way to determine if the debt was satisfied is to ask the applicant for proof.
Why is the account listed as “current” when there has not been any activity on it in years?
Many financial institutions who think the applicant’s relationship with them was favorable will consider an account current, even if several years have passed.
Why does it seem like the information is incomplete?
Some financial institutions chose not to update their information every month. Furthermore, if others chose to update every month, sometimes the quality and depth of the information is inconsistent. A bank may share 4 pieces of data in June and 9 pieces of data in July. As always, are always happy to work with you at any time, on reports where this occurs to ensure you are comfortable interpreting the information.
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