Consumer Report

A consumer report is essentially an assessment of an individual's credit-worthiness; thus it is popularly known as a credit report. A consumer report is usually prepared and furnished by a consumer reporting agency (credit bureau in popular lingo) like Equifax, Experian and TransUnion.

So much more than a credit report:

A consumer report can contain other information such as those that pertain to a person's lifestyle, reputation, character, etc and spans the individuals' relevant activities such as payment and purchase transactions/history. All these types of information are included for the express purpose of assessing a person's financial standing/status and credit capacity as well as his general inclinations (character, reputation and lifestyle).

Not a credit score:

A consumer or credit report is not synonymous to a credit score. A credit score is a single numerical figure that results from a credit scoring system and is thus interpreted as a quantitative measure of a person's credit-worthiness (i.e. if I lent him money, will he and can he pay me back; is he a good credit risk?) The higher your credit score is, the less risky you will seem to lenders.

You can get your credit score for a fee from any of the credit reporting agencies.

Uses:

Since an evaluation of an individual's ability to pay his or her debts figures prominently in a consumer report, it (among other criteria) is used by lending agencies and financial institutions as a basis for deciding whether or not to approve an individual's loan application.

Generally, a consumer report may also be used for the following purposes:

• employment: a prospective employer requests a consumer report on a job candidate; a current employer requests a consumer report on an employee




• insurance: an insurance company requests the report to determine an individual's eligibility for insurance coverage; an insurance company requests the report for the purpose of evaluating an individual's current credit obligations




• procurement of license or benefit: an agency requests a report on an individual who is being considered as a possible recipient of a benefit or who is requesting a licence (only when the law says that an individual's financial status or capacity should be assessed before such license or benefit is granted)




• investment/service provision: an investor requests a report about an individual or business entity on whom/which he is considering investing; a service provider requests the report to find out whether individual or a business has the capacity to meet his financial obligations




• litigation: a consumer report is requested by virtue of a subpoena issued by court




• child support: a consumer report may be requested in order to determine an individual's capacity to make and maintain child support payments and, if so, to determine how much such child support payments should be




• consumer's request: an individual, when necessary, can get a copy of his or her own consumer report through a written request to the consumer reporting agency; an individual is legally entitled to request a free copy of his or her credit report from the credit reporting agencies above-mentioned every 12 months.




• other justifiable purposes: generally, whenever there are reasonable grounds for needing to assess a person's financial standing and credit worthiness, a consumer report can be requested

Disclaimer: These are just general descriptions of purposes. Requesting a consumer report for each of the above potential uses may entail specific conditions and exceptions. This post is not meant to be authoritative or comprehensive. Check out the Fair Credit Reporting Act for more specific information.