What is an Investigative Consumer Report and how does it differ from a credit report? There is quite a substantial difference between the two, and any savvy consumer should learn the differences as they both can have an impact on your credit history.
What is a Credit Report?
Your credit report is a collection of data gathered from your creditors, which summarizes your credit history. When you apply for a new line of credit or loan, your bank, credit card company or mortgage lender uses your credit report to evaluate the potential risk of lending money to you.
Credit reports are provided by the three main credit bureaus — Experian, Equifax and Transunion — and are available for free once per year from annualcreditreport.com. Credit reports will provide a comprehensive, detailed summary of the credit that has been extended to you and whether you’ve paid it back on time.
Keep in mind, however, a credit report is not the same as a credit score, which summarizes the information on your reports into a three-digit number used for evaluation purposes.
Investigative Consumer Report Basics
An investigative consumer report, on the other hand, is a type of report that is more like a detailed background check — it summarizes information about your character, general reputation, personal characteristics and way of living. The gathering of that information may even include interviews with your neighbors, friends and associates about your lifestyle, character and reputation.
Investigative consumer reports will not include any information about your credit record obtained directly from a creditor, or from you. It is not used, and cannot be used, as part of an application to grant credit. Normally, the use of investigative consumer reports is limited to certain specific uses, such as employment background checks, or insurance application.
If your application for insurance is rejected, you may contact the credit reporting agency for more information. However, the credit reporting agency does not need to reveal the sources of its information.
Investigative consumer report comparisons are effective methods of evaluating a person, especially for employment. Federal law regulating investigative consumer reports is strict, but state laws governing background checks and credit checks do differ from one another.