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Consumer reporting agencies follow your moves

Specialty reports identify risks of doing business with you

By now, you've probably heard about the Big Three credit bureaus (Equifax, Experian and TransUnion), which monitor your financial history and issue credit reports and credit scores to potential lenders.

But did you know that there are dozens of other specialty consumer reporting agencies that track your history for activities that may not appear on your regular credit reports -- things like bounced checks, late utility payments, insurance claims and prescription orders?

Most people never hear about these companies until they're suddenly turned down for an apartment, checking account, insurance policy or even a job or promotion. But you need to know that potential landlords, banks, insurance companies and employers are very likely ordering specialty reports to help them assess the risk of doing business with you.

That's fine if you've got a squeaky-clean track record. But what if their files contain mistakes; or worse, what if someone has hijacked your identity and is poisoning your record with their own bad behavior?

Fortunately, you do have recourse. Under federal law, you can request a copy of your report once a year from each agency, generally for free. You're also entitled to a free copy whenever an "adverse action" is taken against you because of something in the report. (For example, if you're turned down for a checking account.)

Unfortunately, there's no central clearinghouse for these specialty agencies so you need to contact each individually. However, the Consumer Financial Protection Bureau has taken some of the legwork out by compiling a list of the most commonly used agencies, along with instructions and contact information for ordering your reports. (Search "Specialty Consumer Agencies" at www.cfpb.gov.) Another great resource is the Privacy Rights Clearinghouse's fact sheet on specialty reports at www.privacyrights.org/

Specialty consumer reporting agencies collect information about you from various sources and share it with creditors and other businesses, including:

Public records of criminal and civil cases

Credit history

Bankruptcy filings

Companies with which you have an existing or prior relationship

Medical information

Driving records

Typical inquiries might include:

Check-writing history -- for banks, credit unions and businesses that accept payments by check. They'll look for things like bounced or returned checks and fraud.

Medical conditions and prescription drug history -- if you're applying for an individual life, long-term care or disability insurance policy. (Note: Health insurers can't deny coverage or charge higher premiums because of preexisting conditions.)

Residential -- landlords checking your tenant history, credit, criminal background, etc.

Auto or homeowner/renter's insurance -- insurers will screen your records for things like traffic violations, claims and property losses

Payday lending -- creditors investigating people who don't use traditional financial services (banking, credit cards, etc.) might evaluate payday loans, check-cashing services, prepaid cards, etc.

Utilities -- If you're trying to open a new utility, phone, cable or Internet account.

Employment background -- By law, employers must obtain your permission to run a background check. Unfortunately, they're generally not required to identify which company they're using unless they decide not to hire you -- it doesn't hurt to ask ahead of time, though.

Note that when you dispute information in your reports, agencies are legally obligated to investigate and correct any inaccurate or outdated information. Also, they must give you an update on the status of your request to view your report. However, there is no time limit on when your request must be processed.

Bottom line: You might not realize there's false or potentially damaging information being reported about you, so get in the habit of ordering specialty consumer reports along with your credit reports.

Jason Alderman directs Visa's financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney/ n

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