Yes, it is true that businesses can pull your credit report without your permission. Your future may rely on what’s in your credit report and businesses can judge you by it no doubt. And the worse thing is that pulling your report can potentially lower your hard built credit score.

Why Does It Affect Your Score When Someone Checks Your Credit?

It isn’t always necessary that your credit score may get affected. Sometimes creditors can check your credit report with a “soft” inquiry, which doesn’t count against you. This type of credit check is performed when you check your own credit or get pre-screened by credit card companies.

When you actively apply for a line of credit, such as a credit card or a loan, then a “Hard” inquiry occurs. Hard inquiries have the potential to decrease your credit score. Too many hard inquiries give the impression that you’re applying for more credit than you can handle. Thus creditors don’t like to see a lot of hard inquiries in a short period of time.

Hard Inquiries Without Consent

It’s typical for employers to check your credit in this way, but when other companies such as rental car pull your credit report if you reserve a car using a debit card rather than a credit card, then this is where the problem starts. Businesses start using hard inquiries without a person’s knowledge or consent. Renting a car is not a good reason for a decrease in your credit score.

Your credit report can be subject to hard inquiries without your consent in other cases too. Credit transactions and collections; any business transaction that you initiate; underwriting insurance; reviewing any open account to check your credit; and determining your eligibility for government benefits which are dependent upon your financial situation, can all lead to a hard inquiry and thus a decrease in credit score.

Check Your Credit Report

It is better to get a copy of your credit report if you’re worried about items that could be having a negative impact on your credit score. You’re eligible to get one free copy per year. Visit a site like AnnualCreditReport.Com to request your report from all three of the major credit bureaus – Experian, Equifax, and TransUnion. Once you receive your report, make sure to dispute any information that you think is incorrect.

Although it is unfair that we don’t have any control over our own credit score but by analyzing our credit report regularly, and correcting any mistakes if found, we can do our part in maintaining a good score.

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