8 Types of Companies That Check Your Credit Report

When you apply for a loan, you expect the lender to pull your credit report. After all, you’re borrowing money. It makes sense that your lender wants to see what kind of risk you present.

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But what about other types of companies?

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You might be surprised to discover that, even if you’re not borrowing money, certain companies may be looking at your credit report.

The following are examples of the types of companies that might be checking up on your credit.

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1. Credit card companies

A credit card company can look at your credit report when you apply for a card. However, if you’re a customer, that company can look at your credit report anytime, according to the Consumer Financial Protection Bureau.

Additionally, prospective creditors can access certain information in your credit file to determine whether to make you what’s known as a “prescreened” offer for a new credit card.

Prescreening is allowed under the federal Fair Credit Reporting Act, but you can opt out of prescreening. We break down the process in “The Secret to Stopping Unwanted Credit Card Mail for Good.”

2. Insurance companies

The Fair Credit Reporting Act also allows credit reporting companies to release your credit report in association with “offering insurance coverage or setting insurance premium charges,” says the Consumer Financial Protection Bureau.

While federal law allows insurers to prescreen you for offers, it also gives you the ability to opt out of prescreening.

3. Employers

As part of a background check, employers can request a copy of your credit report. The Fair Credit Reporting Act allows credit reporting companies to release your report for employment purposes.

However, the employer must get your written permission to pull your credit report beforehand. You can refuse, but that could be grounds for the employer to reject your application, according to the Federal Trade Commission.

Related: 5 Ways Retirees Can Lower Their Income Taxes

4. Telecommunication companies

When you sign up for phone, TV or internet service, the service provider might check your credit.

It’s not exactly a loan, but some companies want to make sure you’re likely to pay your bill, says James Garvey, the CEO of credit-building site Self Lender.

“The telecom provider wants to check if the customer owes money to the provider itself or to another telecom provider,” Garvey tells Money Talks News.

5. Public utilities

Signing up for water, gas or electricity? You might need to submit to a credit check, says Logan Allec, a certified public accountant and the founder of financial education website Money Done Right.

“Utility bills are generally paid in arrears, meaning you’re billed for usage after the fact,” Allec tells Money Talks News. “In a sense, these companies are making you a short-term loan. They let you use $50 of water last month, and you have until a certain date to pay them for it.”

If you have a low credit score, Allec points out, the utility might not have confidence in your ability to pay bills on time and might charge you an upfront deposit.

6. Government agencies and courts

“You may think that the government should have no business requesting your credit,” says Allec, “but sometimes they actually have a good reason to.”

Allec points out that when you apply for government assistance, you might be subject to a credit check to see if you truly qualify.

Additionally, the Fair Credit Reporting Act permits credit reporting companies to release your credit report:

In response to court orders
In response to subpoenas
For certain child support awards and enforcement purposes

7. Landlords

Looking for new digs? Your landlord-to-be might want a peek at your credit report, says Leslie Tayne, a New York City-based lawyer specializing in consumer finance and debt.

She points out that renting an apartment is a long-term agreement, and many landlords want to be sure that you won’t cause trouble.

“While rent is not typically reported to the credit bureaus, your credit report can give an indication of your overall likelihood to pay bills on time and your financial responsibility,” Tayne tells Money Talks News.

In some cases, she says, if you have a poor score, you might have to provide a larger security deposit.

8. Assisted living facilities and nursing homes

Expect to be subject to a credit check when applying to live in an assisted living facility or nursing home.

“These facilities treat applications like applying for an apartment, especially since costs are typically high,” Tayne says. “Having good credit shows the facility that you’re responsible with your payments and that you’ll use whatever funds you have to pay for the stay.”

7 Questions You Should Ask Before Buying Life Insurance

Because the job of life insurance agents is to sell policies, they may not tell you everything you need to know before you make a purchase.

Agents typically are paid through commissions. The more insurance you buy, the more money they make. It’s up to you to make sure you’re well-informed and choose the right policy. That means doing your homework and asking the right questions.

Following are some important questions to ask before you make a life insurance purchase.

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1. Why do I need a life insurance policy?

Contrary to what you may think, not everyone needs life insurance. Your agent should be able to give you a compelling reason why having a policy would be helpful to you and your beneficiaries.

It’s important to remember that the primary purpose of life coverage is to replace your income when you die, to ensure your dependents are provided for. A parent of young children typically has a high need for life coverage, especially if he or she is the family’s primary wage earner.

However, if you have no spouse or dependents, a life insurance policy might not be necessary. Also, if you have enough financial resources to provide for your dependents if you died unexpectedly, buying life insurance may be a waste of money.

2. What is the difference between term and cash-value life insurance?

Term and cash-value are the two basic types of life insurance. It’s important to know the difference since cash value typically is more expensive.

A term policy insures you for a fixed period, such as 10 years. At the end of the term, you must renew your policy or buy a new one.

Cash-value insurance — also known as whole or permanent life insurance — covers you for your entire life, as long as your premiums are up to date. Over time, this policy will build a cash value on a tax-deferred basis. That means you’ll be able to surrender it before your death for a cash payout. Remember, the cash value is less than the face value that’s paid when you die or when the policy reaches maturity.

Looking for term insurance? Bestow can get you an actual price and approval in minutes — no physical or lab testing required.

Or, try Policygenius, which will compare dozens of insurers and find a match based on your age and health.

3. How much life insurance coverage do I really need?

Taking on more coverage than you need is a waste of money. A common goal is to have enough coverage to pay off your home mortgage and provide for dependents if you die unexpectedly.

Be wary of agents who try to sell you policies for very large amounts, such as $1 million, without justifying the need. For example, if your children are grown and supporting themselves, your need for life insurance benefits is less than if you have minor children depending on your income.

4. Is buying a cash-value life policy a good investment?

Permanent, cash-value policies sometimes are sold as investments. While such policies have an investment component, their main purpose is to replace income for your dependents if you die.

Because each policy is different, make sure you understand how the investment portion works. Find out if there are better ways to invest your money. A qualified financial planner can help you understand how such a policy would fit in with your overall savings and investment strategy.

Need to find a financial planner or adviser? Here are some simple tips. Once you know what you’re looking for, stop by our Solutions Center and find a great financial adviser.

5. Does it make sense to buy a life insurance policy for a child?

A child who develops a medical problem early in life might have trouble qualifying for life insurance coverage as an adult. By purchasing a permanent, cash-value policy early, you can make sure the child remains insurable later in life, despite health issues.

Before you insure a child, however, remember that the primary reason for having life insurance is to replace the income of wage earners. Since children normally don’t have incomes, a life policy becomes unnecessary in most circumstances.

A better way to guarantee the well-being of children may be to make sure that their parents have life insurance coverage. That way, there will be money for the child to live on if one or both parents die.

Related: 15 of the Most Outrageously Overpriced Products

6. How costly will it be to renew a term life policy?

If you choose a term life insurance policy, it likely will be renewable, even if your health has worsened and your risk of death has increased since the original policy was purchased.

However, each time you renew a term policy, the price may go up. That’s because insurance is a business and policy prices are based on risk. The greater the risk of death as you age, the higher the cost is likely to be.

Be sure to ask your agent if your term policy can be renewed and how much your monthly premiums are likely to increase over time.

7. Am I prepared to tell my beneficiaries about my life insurance policy?

Not everyone tells their beneficiaries about their life insurance policy. However, if you don’t tell them, they won’t be able to collect benefits when you die.

If the policy goes unclaimed, all of the money you’ve spent on monthly premiums will be wasted.

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