When doing a credit check, you usually make a quick look over your finances. It is very good that you look after your business and credit ratings so properly. And making it with a credit check is a potential sign for your responsibility, reliability and good knowledge to run your things with money. However, there is one other side of making a credit check. And today we would like to shed light on it.
When to do a credit check?
You may also do a credit check for the potential partner in your future financing things. You may do a credit check if a landlord and you cannot value the eventual tenants that apply for your property. You may also do a credit check, in case you are about to get a new partner in your small, family or big business in a large and growing company. Last, but not least, you may do a credit check, in case you a lender and you need to be sure whom you give your money and whether the borrower is able to return them. In short, do a credit check, when you hesitate and when you do not. A good credit check is always a good guarantee!
1. Have a permissible use, when you do a credit check
The Fair Credit Reporting Act is the main basis that gives you the right to do a credit check. For example, the act points directly which the only occasions to do a credit check on someone (individual or company) are. You may do a credit check if you an employer and you hire new people in your office. Though, you cannot do a credit check, if you have already hired a person and he had worked in your company for a couple of years. This will be a total violation of the Fair Credit Reporting Act. The act says that you cannot do a credit check with no reason, because it will be nothing else but digging in someone`s finances. Besides, all the information in the credit reports, which are collected by the private bureau companies, is private. It can be given to other people for a particular reason only!
2. Get permission to do a credit check
Besides obeying the main rules and procedures in the Fair Credit Reporting Act, you also need to get permission to do the credit check. There is no way for you to do a credit check secretly by hiding this from the individual or the company. Moreover, when you do a credit check some particular personal data are required to be filled if you want to get the needed information. So, first of all, report to the person and then you may do a credit check for his finances.
3. Find proper services to do the credit check
There are three national reporting companies you may contact to do a credit check. Any other source of information will be either wrong or illegal. Find out the possibilities you have and pick up the national reporting company. The procedure will be performed correctly and thus, you may use the information correctly after you do a credit check. The three of these national reporting companies are authorized by the government, so you should not have any doubts about the veracity in the credit check information you will receive for a particular individual or a particular company.
4. Interpreting the results after you do a credit check
Negative notes in the credit checks are not always as bad as they look. In case you cannot deal with interpreting properly it is better for you to hire a consultant. He will explain to you the real essence of the results from the credit check.