Credit checks are required for a variety of reasons as they relate to investigating one’s credit history when they are in the process of looking for one or other type of credit. Credit checks can be used by financial institutions when applicants require one of the types of loans that they offer. Credit checks may also be required by landlords when looking to approve a tenants’ stay on their property. The credit check acts is a safeguard that should ideally show whether one cannot afford the credit that they are applying for as well as if they will pay their debts as per their history in this regard.
Credit checks usually require those looking to investigate to have a permissible use for the reports they require. These include credit checks for the purposes of employment, insurance underwriting and licensing of certain types of professionals amongst others. These examples of permissible use do not encompass all scenarios and credit checks need to be necessary on their own merit.
When one is looking to do a credit check on an applicant it is important that the applicant is informed of this which is legislative regulation in most jurisdictions. Once this has taken place, there a variety of institutions that specialise in this type of reporting that one may approach to do the credit checks. Credit checks include information such as relevant public records.